UNIVERSITY  OF  CALIFORNIA 
,     AT  LOS  ANGELES 


PRIVILEGE  AND 
DEMOCRACY  IN  AMERICA 


BOOKS  BY  FREDERIC  C.  HOWE 

Pdblished  by  CHARLES  SCRIBNER'S  SONS 


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PRIVILEGE  AND 
DEMOCRACY  IN  AMERICA 


BY 
FREDERIC  C.  HOWE,  Ph.D. 

AUTHOR  OP    "the    CITY:    THE   HOPE    OF   DEMOCRACY";     "THE   BRITISH   CITT I 
THE   BEGINNINGS   OF   DEMOCRACY,"    ETC. 


NEW  YORK 
CHARLES    SCRIBNER'S   SONS 

1910 


COPTHIGHT,    1910,    BY 

CHARLES  SCRIBNER'S  SONS 


Published  March,  1910 


4 
i 


H83 


f 


TO 

MY  MOTHER 


21)8095 


PREFACE 

Down  to  the  beginning  of  the  nineteenth  century 
government  was  merely  the  will  of  a  class.  Politics 
mirrored  the  wish  of  the  privileged  orders.  And  the 
motive  which  inspired  the  governing  classes  was 
primarily  an  economic  one.  This  interpretation  of 
politics  has  only  begun  to  influence  the  writing  of 
history.  Yet  in  this  motive  is  to  be  found  the  cause 
of  wars  and  of  peace,  of  intrigue  and  of  diplomacy, 
of  force  and  of  fraud,  of  practically  all  legislation 
relating  to  religion,  taxation,  industry,  and  the  rela- 
tion of  classes.  The  struggles  of  kings  and  parlia- 
ments, of  burghers  and  peasants,  of  cities  and  over- 
lords had  their  origin  in  the  desire  to  use  the 
agencies  of  government  for  the  advantage  of  one  or 
the  other  of  the  contending  orders.  We  have  only 
to  study  the  Parliamentary  struggle  which  has  just 
closed  in  Great  Britain,  to  see  a  confirmation  of 
this  fact.  In  this  instance  the  conflict  was  carried 
on  by  peaceful  means.  But  the  motive  of  the 
struggle  was  the  same.  It  was  a  warfare  of  classes, 
organized  through  parties  instead  of  with  armed 
retainers,  but  bent  on  the  control  of  the  govern- 
ment for  economic  advantage. 


viii  PREFACE 

During  these  centuries  religion  was  the  hand- 
maiden of  the  class  which  ruled.  It  aided  in  the 
creation  of  a  moral  code  which  kept  the  masses  of 
the  people  in  subjection,  and  contented  with  their 
lot.  It  taught  the  paralyzing  ethics  of  obedience, 
of  reverence,  of  humility,  of  duty.  All  of  the  rela- 
tions of  society  were  created  by  the  class  which 
ruled.  And  the  class  which  ruled  was  the  class 
which  owned.  Its  constant  aim  was  to  control  the 
distribution  of  wealth. 

When  society  emerged  from  the  anarchy  of  the 
Middle  Ages,  law  was  substituted  for  the  reign  of 
force,  which  the  ruling  classes  had  employed  in  an 
earlier  age.  And  by  means  of  law  humanity  was 
made  to  obey.  By  law  the  feudal  lord  reared  him- 
self above  the  serf  just  as  the  patrician  had  reared 
himself  above  the  pleb.  And  through  the  aid  of 
religion,  education,  and  the  administration  of  justice, 
law  was  given  a  solemn  and  religious  sanction. 
Through  these  agencies  the  economic  framework  of 
society,  as  well  as  the  relations  of  classes,  was  ad- 
justed to  suit  the  will  of  the  ascendant  class. 

''The  holders  of  riches  always  appropriate  to 
themselves  political  authority,"  says  Achille  Loria, 
the  eminent  Italian  economist.  This  ''is  common 
to  the  various  historical  phases  of  capitalistic  prop- 
erty. It  is  the  class  that  predominates  economi- 
cally that  holds  the  political  power  in  each  historical 
period.     Thus  in  the  Grseco-Italian  world  it  was 


PREFACE  ix 

the  slave-owning  class,  in  the  Middle  Ages  it  was 
the  feudal  lords,  and  at  the  present  epoch  it  is  the 
bourgeois  proprietors  who  are  politically  supreme."' 

To  what  extent  has  democracy  shifted  this 
ascendancy?  How  far  do  the  laws  of  America  re- 
flect the  popular  will  and  the  economic  relations  of 
men  correspond  to  the  new  distribution  of  power? 
Has  the  political  revolution  of  the  nineteenth  cen- 
tury carried  with  it  a  revolution  in  the  economic 
environment,  which,  in  the  last  analysis,  controls 
the  life,  the  liberty,  the  morals,  and  the  well-being 
of  humanity?  For  man's^whgle Jife  is  moulded  by 
his  economic  environment^  And  this  is  made  by 
law.  Not  by  natural  law,  not  by  moral  law,  not 
alone  by  the  common  law,  but  by  the  laws  enacted 
by  Congress  at  Washington,  by  the  legislatures  of 
our  states,  and  by  the  councils  in  our  cities.  More 
than  anything  else,  statute  law  determines  the  well- 
being  of  the  people.  More  than  anything  else,  it 
controls  the  distribution  of  wealth. 

In  the  past,  at  least,  law  has  been  the  fountain 
of  servitude  as  well  as  of  liberty,  of  injustice  as  well 
as  of  justice,  of  poverty  as  well  as  prosperity,  of 
crime  as  well  as  of  the  punishment  which  it  sought 
to  prevent.  And  many  are  asking  to-day  whether 
conditions  have  really  changed.  Do  not  the  few 
still  elevate  themselves  upon  the  backs  of  the 
many  by  means  of  law,  by  means  of  the  control  of 

'  The  Economic  Foundations  of  Society,  p.  28. 


X  PREFACE 

government  and  the  agencies  of  justice  and  public 
opinion?  Is  there  not  truth  in  the  suggestion  that 
society  itself  is  responsible  for  the  wreckage  which 
industry  has  cast  upon  our  shores?  Are  not  pov- 
erty and  the  attendant  evils  of  ignorance,  disease, 
vice,  and  crime  the  children  of  our  own  flesh  and 
blood?  Have  not  the  liberties,  which  represent 
centuries  of  sacrifice  and  suffering,  only  conferred 
upon  humanity  the  shadow  of  power,  while  the  sub- 
stance is  still  in  the  hands  of  an  ascendant  class, 
which  has  made  use  of  the  new  machinery  as  readily 
as  it  did  the  old  ?  These  are  questions  which  under- 
lie all  others  in  the  unrest  which  is  expressing  itself 
in  city,  state,  and  nation.  These  are  the  questions 
which  are  challenging  authority  in  every  country 
in  the  world.    And  it  is  these  questions  that  tliis 

book  aims  to  consider. 

Frederic  C.  Howe. 

Clevelaj^d,  Ohio,  January,  1910. 


CONTENTS 

CHAPTER  PAGE 

I.  The  Lure  op  the  Land 3 

II.  The  Economic  Foundations  op  Democracy    .     .  18 

III.  The  Rape  of  the  Nation 28 

IV.  The  Strangle  Hold  of  Monopoly 45 

V.  The  Tools  of  Privilege 58 

VI.  The  New  Serfdom 71 

VII.  Some  of  the  Costs  op  Tenancy 83 

VIII.  The  Evolution  of  Serfdom 94 

IX.  The  Tyranny  of  the  Dead 106 

X.  The  Servitude  op  To-morrow 113 

XI.  The  Unearned  Increment 122 

XII.  A  Feudal  Survival 138 

XIII.  "From  Him  That  Hath   Not  Shall  Be  Taken 

Away  Even  That  Which  He  Hath  "...  148 

XIV.  Some  op  the  Costs  of  Land  Monopoly.     .    .    .  160 
XV.  The  Future  op  Labor 173 

XVI.  The  Distribution  of  Wealth 185 

XVII.  The  Ascendancy  of  Privilege 202 

XVIII.  An  Overlooked  Cause  op  Poverty 215 

XIX.  The  Cause  op  Civilization  and  Decay  ....  231 

XX.  The  Economic  Foundations  of  Morals      ,    .    .  243 

XXI.  The  Remedy  Proposed 255 

XXII.  The  Remedy  Considered 264 


xii  CONTENTS 

CHAPTER  PAGE 

XXIII.  The  New  Dispensation 276 

XXIV.  The  Open  Dooe  and  the  Open  Highway  .    .    .  287 
XXV.    The  Democracy  op  To-morrow 294 

Appendix    I 303 

Appendix  II 306 

Index 311 


PRIVILEGE  AND  DEMOCRACY 
IN  AMERICA 


CHAPTER  I 
THE  LURE  OF  THE  LAND 

In  the  development  of  America  may  be  seen  the 
development  of  Western  civilization.  Here  as  else- 
where evolution  has  followed  a  sequence  as  orderly 
as  it  was  inevitable.  All  Europe  as  well  as  all 
America  has  been  fashioned  by  the  same  economic 
influences  and  the  political,  social,  and  industrial 
problems  of  the  present  day  all  trace  their  origins 
back  to  beginnings  in  very  early  times,  while  the 
long  migration  of  peoples,  which  has  finally  reached 
an  impassable  barrier  by  the  western  seas,  is  but 
the  continuation  of  a  movement  which  has  been  in 
progress  since  long  before  the  Christian  era.  As  the 
eminent  Italian  economist,  Achille  Loria,  says: 
''America  has  the  key  to  the  historical  enigma  which 
Europe  has  sought  for  centuries  in  vain,  and  the 
land  which  has  no  history  reveals  luminously  the 
course  of  universal  history." 

This  is  most  obvious  in  the  migrations  of  peoples, 
migrations  which  are  not  confined  to  those  of  the 
barbarian  hordes,  which  swept  over  the  face  of  Eu- 
rope in  the  centuries  which  followed  the  dismember- 
ment of  the  Roman  Empire.  For  the  population  of 
the  world  has  been  in  migration  from  the  beginnings 

3 


4  PRIVILEGE  AND  DEMOCRACY 

of  recorded  history,  and  so  far  as  Western  civiliza- 
tion is  concerned  the  movement  has  always  been 
away  from  the  east.    The   centre   of   civilization 
shifted  from  the  rivers  of  Mesopotamia  to  Egypt 
and  Palestine.    Thence  it  passed  on  into  Greece, 
where  in  the  fifth  and  fourth  centuries  B.  C.  it  gave 
birth  to  a  philosophy,  literature,  and  art  that  have 
remained  the  inspiration  of  subsequent  centuries. 
Colonies  were  settled  all  about  the  shores  of  the 
Mediterranean  Sea.    Then,  as  now,  men  were  lured 
from  their  ancestral  homes  by  the  dreams  of  new 
countries  where  opportunity  still  was  free.    Among 
the  colonies  so  founded  was  Rome.    From  the  seven 
hills  upon  the  river  Tiber  the  settlement  expanded 
into  a  nation,  just  as,  many  centuries  later,  the  settle- 
ments in  Massachusetts  and  Virginia  were  the  seeds 
of  a  new  people.    Roman  arms  carried  the  Roman 
eagles  over  the  entire  peninsula  of  Italy.    In  time 
all  Spain,  Germany,  Africa,  and  the  East  acknowl- 
edged the  dominion  of  the  Republic. 

During  the  first  few  centuries  of  the  Republic 
conditions  of  life  were  simple  in  the  extreme.  The 
amount  of  land  which  the  individual  could  own  was 
limited  to  what  he  could  cultivate.  Substantial 
equality  was  thus  secured  to  all.  Upon  each  farm 
was  a  citizen  soldier  who  fought  for  his  home  and  his 
household  gods.  Conditions  were  not  dissimilar  to 
those  which  characterized  the  first  two  centuries  of 
the  American  colonies. 


THE  LURE  OF  THE  LAND  5 

With  the  expansion  of  the  city  of  Rome  into  a 
nation  the  government  became  more  complex. 
PoUtical  control  passed  into  the  hands  of  an  economic 
class.  It  finally  centred  in  the  Senate,  which  repre- 
sented the  moneyed,  landed,  and  creditor  class.  Im- 
mense areas  of  land  were  added  to  the  republic  by 
conquest.  This  land  belonged  by  law  to  all  the 
people.  It  was  the  ager  publicus,  the  folk  land  of  the 
nation.  It  was  not  unlike  the  Northwest  Territory 
acquired  from  Great  Britain  by  the  American  colo- 
nies. But  the  members  of  the  aristocracy  in  control 
of  the  government  leased  this  land  to  themselves  at 
nominal  rentals  instead  of  allotting  it  among  the 
people  to  whom  it  belonged.  They  divided  it  into 
great  plantation  estates,  which  were  used  for  grazing 
or  were  worked  by  slave  labor.  As  time  went  on 
the  land  was  needed  for  settlement.  Population  in- 
creased and  the  legions  desired  a  home  for  them- 
selves and  their  children,  just  as  did  the  American 
colonists  after  the  war  with  France.  But  the  mem- 
bers of  the  aristocracy  refused  to  relinquish  the  land 
which  they  had  illegally  enclosed.  They  resisted 
every  effort  to  have  the  land  allotted.  They  even 
abolished  the  nominal  rentals  which  they  had  agreed 
to  pay  the  state  and  assumed  the  right  of  absolute 
private  ownership  instead. 

By  these  means  the  aristocracy  of  Rome  acquired 
possession  of  nearly  all  Italy.  The  free  citizens, 
who  had  been  the  nation's  strength,  were  driven  to 


6  PRIVILEGE  AND  DEMOCRACY 

the  city  or  reduced  to  slavery  by  the  cruel  laws  of 
debt  which  the  senatorial  class  had  enacted.  Here- 
in was  the  beginning  of  national  decay.  It  seems  to 
have  been  fearfully  rapid  in  its  extension.  Accord- 
ing to  Marcus  Philippus  ''there  were  not  two  thousand 
individuals  in  the  commonwealth  who  were  worth 
any  property"  by  the  second  century  B.  C.  When 
Tiberius  Gracchus  passed  through  Tuscany  to  Nu- 
mancia  he  ''found  the  country  almost  depopulated, 
there  being  hardly  any  free  husbandmen  or  shepherds, 
but  for  the  most  part  only  barbarians,  imported 
slaves."  *  It  was  this  change,  says  Mommsen, 
"which  tended  most  directly  to  accomplish  the  ma- 
terial and  moral  annihilation  of  the  middle  classes."  ^ 
The  Roman  historian  Pliny  has  testified  that  "the 
great  estates  have  ruined  Italy." 

The  small  farmer  was  ruined  by  debt  and  tax- 
ation. He  was  unable  to  compete  with  slave  labor. 
He  was  driven  to  the  city  or  to  foreign  lands  by 
the  monopoly  of  the  land.  By  this  process  Italy 
was  almost  denuded  of  free  citizens  at  a  time 
when  Roman  arms  had  conquered  the  world.  The 
Roman  freeman  was  driven  from  his  native  soil  by 
the  patrician  class  who  had  acquired  possession  of 
the  land  of  his  fathers.  It  was  this  that  drove 
him  into  Gaul,  into  Spain,  into  Germany,  even  into 
distant  Britain. 

'  Plutarch's  Lives,  Tiberius  Gracchus. 
2  History  oj  Rome,  Vol.  I,  p.  347. 


THE  LURE  OF  THE  LAND  7 

It  was  this  that  peopled  Europe  with  Roman 
colonists.  In  time  all  Europe  became  crowded,  just 
as  Greece  and  Italy  had  been  many  centuries  earlier. 
As  population  increased,  so  did  the  demand  for  land. 
It  came  to  have  a  monopoly  value.  So  long  as  the 
land  was  held  by  feudal  tenure,  with  the  fixed  and 
customary  services  which  feudalism  involved,  the 
worker  was  secure  in  his  holding.  He  could  not  be 
dispossessed  by  the  overlord.  Neither  his  rent  nor 
his  services  could  be  increased.  The  interest  of  the 
tenant  was  the  same  as  that  of  the  lord.  They  were 
joint  owners  of  the  land.^  But  just  as  the  Roman 
freeman  was  driven  from  Italy  by  the  creation  of  the 
latifundia  or  plantation  estates,  so  the  freemen  of 
Europe  were  reduced  to  poverty  by  the  substitution 
of  money  rents  for  feudal  services.  Through  this 
change  the  overlord  became  the  absolute  owner  of 
the  land.  All  Europe  was  divided  into  private 
estates,  worked  by  serfs  subject  to  competitive  rents. 
It  was  this  that  led  to  the  settlement  of  America 
just  as  it  led  to  the  settlement  of  Europe  at  an  earlier 
day. 

For  many  centuries  the  people  of  England  were  a 
nation  of  home-owners.  A  part  of  the  land  was  in 
individual  holdings.  A  much  larger  part  was  held  in 
common  by  the  village.  This  was  modified  by  the 
Norman  Conquest.  The  land  of  England  was  dis- 
tributed by  the  Conqueror  among  his  followers.     It 

'  See  chapters  VIII  and  IX. 


8  PRIVILEGE  AND  DEMOCRACY 

was  divided  into  great  estates.  The  great  barons 
in  turn  divided  it  among  their  vassals.  King,  lord, 
vassal,  and  serf  were  united  by  mutual  services  and 
mutual  obligations.  The  nexus  of  all  relations  was 
the  land.  There  was  little  money  and  no  standing 
army.  The  state  was  supported  by  military  and 
personal  services  which  took  the  place  of  rent  and 
taxes.  Land  was  the  source  of  all  political  and 
social  power.  This  was  the  feudal  state  which  ex- 
isted all  over  the  face  of  Europe  during  the  middle 
ages. 

The  feudal  relationship  began  to  disintegrate  dur- 
ing the  thirteenth  and  fourteenth  centuries.  The 
Black  Plague  of  the  fourteenth  century  hastened 
it.  It  reduced  the  population  of  England  by  one- 
third.^  The  position  of  classes  was  changed.  So- 
ciety was  revolutionized.  The  labor  supply  was  so 
reduced  that  the  villeins  abandoned  their  feudal 
holdings  in  order  to  accept  something  better.  They 
gave  up  the  land  which  was  theirs  by  right  and  under 
a  fixed  rent,  in  order  to  be  wage-earners  or  leasehold- 
tenants.  Instead  of  rendering  personal  services,  they 
now  began  to  pay  money  rent.  Herein  was  the  be- 
ginning of  the  break-up  of  the  old  relationship  which 
insured  to  the  tenant  a  permanent  position  and  at  a 
rent  fixed  in  perpetuity.  Through  it  the  mass  of  the 
people  lost  their  hold  on  the  land.  They  became 
competitive  tenants  instead  of  joint  owners  under 

'  Six  Centuries  of  Work  arid  Wages,  Thorold  Rogers,  p.  223. 


THE  LURE  OF  THE  LAND  9 

customary  rent.  This  has  profoundly  influenced 
Great  Britain.  It  explains  the  degraded  and  im- 
poverished condition  of  her  agricultural  population, 
which,  unlike  that  of  many  of  the  farmers  of  Europe, 
is  but  little  better  than  the  condition  of  the  casual 
worker  in  the  towns.  ^ 

For  some  centuries  after  the  Black  Plague  rents 
continued  low.  Land  was  cheap  because  labor  was 
dear.  In  the  fifteenth  century  land  began  to  rise  in 
value.  The  Spanish  conquest  of  South  America 
flooded  England  with  gold  and  silver.  This  facili- 
tated the  change  from  feudal  services  to  money  rents. 
During  the  reign  of  Henry  VII  the  landed  aristocracy 
began  to  enclose  the  common  lands  which  comprised 

*  The  early  feudal  relationship  of  lord  and  vassal,  in  which  the 
rent  of  the  tenant  is  fixed  and  constant,  still  persists,  with  some 
modifications,  in  certain  portions  of  Europe  where  custom  or  tra- 
dition has  prevented  the  overlord  from  assuming  the  right  of  abso- 
lute ownership  in  the  land.  The  old  relationship  is  still  to  be  found 
in  parts  of  Italy,  France,  and  Holland.  It  also  exists  in  the  old 
French  manors  on  the  lower  St.  Lawrence  in  Canada,  where  the 
farmers  still  pay  a  small  quit-rent  to  the  seigneurs.  Under  these 
tenures  the  rent  remains  unchanged  from  year  to  year,  no  matter 
what  the  value  of  the  land  may  be.  Speaking  of  conditions  in  a 
particularly  favored  region  of  Holland,  Mr.  Broderick  says:  "  M.  de 
Laveleye's  ideal  of  agricultural  felicity  in  Holland  is  to  be  found  in 
the  province  of  Groningen,  where  much  of  the  land  is  cultivated 
under  a  species  of  hereditary  lease,  known  as  Beklem-regt,  at  a 
moderate  and  invariable  rent.  This  system,  he  (i.  e.,  Laveleye) 
says,  derived  from  the  middle  ages,  created  a  class  of  semi-proprie- 
tors, independent,  proud,  simple,  but  withal  eager  for  enlightenment, 
appreciating  the  advantages  of  education,  practicing  husbandry  not 
by  blind  routine  and  as  a  mean  occupation,  but  as  a  noble  profes- 
sion by  which  they  may  acquire  wealth,  influence,  and  the  consid- 
eration of  their  fellowmen."  Cobden  Clvb  Essays,  Systems  of  Land 
Tenure  in  Various  Countries,  p.  133. 


10  PRIVILEGE  AND  DEMOCRACY 

a  great  part  of  the  area  of  the  nation.  There  ''com- 
menced a  struggle  of  the  most  fearful  character.  The 
nobles  cleared  their  lands,  pulled  down  the  houses, 
and  displaced  the  people.  Vagrancy  on  a  most  un- 
paralleled scale  took  place. " '  Henry  VIII  seques- 
trated the  lands  of  the  monasteries,  which  amounted 
to  one-fourth  of  the  area  of  the  kingdom.  He 
turned  their  holdings  over  to  favorites  who  con- 
verted them  into  sheep  preserves  or  raised  the  rents. 
This  still  further  increased  the  poverty  of  the  coun- 
try and  the  extent  of  vagabondage. 

The  remonstrances  of  the  yeomen  and  the  peasants 
to  Parliament  were  all  to  the  same  effect.  They 
said  (1542)  of  the  new  landlords:  ''They  cannot  be 
content  to  let  them  [the  lands]  at  the  old  price,  but 
raise  them  up  daily,  even  to  the  clouds,  so  that  the 
poor  man  that  laboreth  and  toileth  upon  it  is  not 
able  to  live. " 

The  enhancing  of  rents,  and  the  enclosing  of  the 
land  by  monopolists,  was  freely  denounced  as 
destroying  the  commonwealth.  The  famous  sermon 
of  Bishop  Latimer  before  the  king  in  1549  voiced 
the  protest  of  the  people.  "You  landlords,  you 
rent  raisers,  I  may  say,  you  step  lords,  you  unnatural 
lords,  you  have  already  too  much. "  For  that  which 
before  "went  for  £20  or  £40  by  the  year  (which  is 
an  honest  portion  to  be  had  gratis  in  one  lordship  of 
another  man's  sweat  and  labor),  now  it  is  let  for  £50 

'  History  of  Landholding  in  England,  Fisher,  p.  54. 


THE  LURE  OF  THE  LAND  11 

or  £100  by  year/'  so  unreasonably  are  things  en- 
hanced. "For  whereas  have  been  a  great  many  of 
householders  and  inhabitants,  there  is  now  but  a 
shepherd  and  his  dog. " 

By  the  end  of  the  sixteenth  century  the  bulk  of 
the  land  of  England  had  passed  from  the  people  into 
great  holdings.  The  new  landowners  did  not  want 
small  tenants;  it  was  more  profitable  to  raise  sheep. 
Farmers  were  driven  from  their  holdings.  Vaga- 
bondage increased  with  frightful  rapidity.  There  is 
a  tradition  that  72,000  persons  were  hanged  for  this 
offence  during  two  years  of  Henry  VIII's  reign. 
During  the  sixteenth  century  the  peasants  revolted. 
Land  monopoly  was  the  cause  of  these  peasant 
risings.  The  remonstrances  of  the  poor  who  had 
been  driven  off  their  lands  by  the  processes  described 
were  met  with  massacre.  From  this  time  on  pov- 
erty became  more  and  more  unmanageable  and  mis- 
ery more  universal.  Hanging  having  proved  im- 
practicable, the  Poor  Laws  of  Elizabeth  were  enacted. 
Wages  were  fixed  by  law.  Then  followed  the  en- 
closure acts.  The  first  was  early  in  the  eighteenth 
century.  They  continued  into  the  nineteenth.  Be- 
tween 1709  and  1820,  3,387,883  acres  of  the  people's 
lands  were  enclosed  by  the  landowners  in  control  of 
Parliament.  This  still  further  impoverished  the 
agricultural  population  which  was  dependent  upon 
the  commons  for  pasturage  and  fuel.  Despite  the 
poverty  and  vagabondage,  population  increased  very 


12  PRIVILEGE  AND  DEMOCRACY 

rapidly.  According  to  Thorold  Rogers,  the  popula- 
tion of  England  doubled  during  the  seventeenth  cen- 
tury/ This  increased  still  further  the  competition 
for  the  land.  Rents  rose  in  consequence,  while  the 
enclosure  of  the  common  lands  and  the  use  of  the 
land  for  sheep-raising  diminished  the  supply  availa- 
ble for  cultivation.  It  was  by  these  processes  that 
the  land  of  England  was  monopolized.  It  was  this 
that  destroyed  the  yeomen.  It  was  this  that  im- 
poverished England. 

It  was  this  that  led  to  the  settlement  of  America. 
Land  monopoly  drove  the  Puritan  from  England  in 
the  seventeenth  century  just  as  land  monopoly  drove 
the  Catholic  from  Ireland  two  centuries  later.  The 
emigration  of  the  present  day  confirms  this.  It  is 
only  the  dispossessed  who  come.  And  they  come 
almost  exclusively  from  those  countries  where  land 
monopoly  and  competitive  rents  remain  the  least 
impaired.  Wherever  peasant  proprietorship  is  the 
rule  the  population  remains  at  home. 

Switzerland,  Holland,  Denmark,  and  France  are 
countries  of  the  small  proprietor.  These  countries 
have  added  little  to  our  population.  It  is  England, 
Ireland,  Scotland,  Germany,  and  Austria,  and  now 
Russia,  Italy,  and  the  Baltic  provinces,  where  the 
land  is  still  held  in  great  estates,  that  have  sent  their 
landless  peasants  over  the  face  of  the  earth  in  search 
of  a  new  chance,  free  from  the  servitude  which  land 

^Six  Centuries  of  Work  and  Wages,  p.  463. 


THE  LURE  OF  THE  LAND  13 

monopoly  everywhere  involves.  It  is  rarely  the  well- 
to-do,  rarely  the  home-owner,  rarely,  even,  the  tenant 
with  an  interest  in  the  soil  who  migrates.  Men  care 
but  little  about  the  form  of  government  under  which 
they  live  as  long  as  they  are  industrially  free. 
Neither  political  nor  religious  persecution  dislodges 
the  property-owning  class.  So  strong  is  the  tie  of 
property,  of  even  a  little  property,  that  men  suffer 
every  sort  of  oppression  rather  than  abandon  their 
native  homes.  It  is  poverty  that  drives  men  to  dare 
the  unknown.  It  is  land  monopoly  that  has  sent  the 
English  colonist  to  every  quarter  of  the  globe.  It  is 
this  that  explains  the  expansion  of  Russia  into  Siberia, 
of  Japan  into  Korea,  and  of  all  Europe  into  America. 
To  satisfy  one's  desires  with  the  minimum  of  effort 
is  an  elemental  law  to  which  all  nature  responds.  It 
is  the  moving  force  of  all  life.  All  nature  follows 
the  line  of  least  resistance.  The  dumb  animals  of 
the  forest  are  blindly  guided  by  this  principle  which 
nature  has  implanted  in  all  animate  beings.  Life  is 
inconceivable  with  this  motive  absent.  It  underlies 
every  activity;  it  explains  every  movement  of  life. 
It  lies  at  the  bottom  of  all  psychology,  as  well  as  of 
all  political  economy.  To  satisfy  one's  wants  in  the 
easiest  possible  way  is  as  fundamental  to  biological 
and  social  science  as  the  law  of  gravitation  is  to 
physics  or  the  heliocentric  theory  is  to  astronomy. 
In  response  to  this  instinct,  nations,  tribes,  and  in- 
dividuals have  abandoned  ancestral  homes  to  build 


14  PRIVILEGE  AND  DEMOCRACY 

their  fortunes  anew  in  unknown  lands.  Inspired  by 
this  motive,  men  have  crossed  the  seas  and  pene- 
trated into  the  untouched  wilderness — they  have 
braved  the  Arctic  Circle  and  the  jungles  of  the  tropics. 
For  this  they  have  pushed  their  way  into  the  forests 
and  prairies  of  the  distant  West.  It  was  the  desire 
for  economic  freedom,  for  the  satisfaction  of  their 
material  wants  with  a  minimum  of  effort,  that  lured 
the  Argonauts  around  Cape  Horn  and  across  the 
deserts  during  the  gold  fever  of  1849,  just  as  it  lured 
them  into  the  heart  of  the  Yukon  during  the  closing 
years  of  the  last  century. 

Free  land  has  been  the  call  to  which  this  blind 
instinct  of  man  has  been  attuned.  It  has  been  the 
controlling  motive  of  our  life.  For  three  centuries 
the  descendants  of  the  early  settlers,  together  with 
the  incoming  immigrants,  have  responded  to  this  call. 
The  frontier  was  pushed  back  along  the  rivers  and 
over  the  Alleghany  Mountains  like  a  great  glacial 
moraine.  It  spread  out  into  the  north-west  territory. 
Thousands  of  soldiers  were  settled  by  the  govern- 
ment. In  the  closing  years  of  the  eighteenth  century 
land  companies  opened  up  Ohio,  Indiana,  Kentucky, 
and  Tennessee.  New  states  were  carved  out  of  this 
territory.  Long  before  the  Civil  War  the  settler  found 
his  way  beyond  the  Mississippi  River,  inspired  as  were 
his  father  and  his  father's  father,  by  the  desire  for 
opportunity,  an  opportunity  that  was  offered  by  the 
free  land  upon  the  frontier. 


THE  LURE  OF  THE  LAND  15 

This  movement  continued  at  an  accelerated  pace 
during  the  generation  which  followed  the  Civil  War. 
These  were  years  of  phenomenal  railway  develop- 
ment. During  the  five  years  to  September,  1873, 
$1,700,000,000  was  expended  in  railway  building. 
36,000  miles  of  line  were  constructed,  more  than  had 
been  laid  in  the  preceding  generation.  Much  of  this 
development  was  to  the  west  of  the  Mississippi. 
Since  that  time  railway  construction  has  continued, 
until  to-day  the  total  mileage  is  in  excess  of  224,000. 
This  is  equivalent  to  an  eight-track  railway  com- 
pletely encircling  the  globe.  During  this  period  set- 
tlement followed  the  railways,  just  as  formerly  it 
had  crept  up  the  rivers,  or  followed  the  great  lakes  or 
wagon  routes.  A  free  homestead  of  160  acres 
was  a  mirage  of  hope.  It  was  the  voice  of  oppor- 
tunity calling  to  the  pioneer.  It  depopulated  Ire- 
land. It  brought  to  our  shores  the  most  adventu- 
rous spirits  of  Europe.  It  converted  the  hills  of  New 
England  into  a  region  of  deserted  farms.  More  re- 
cently it  has  lured  the  college  men  of  the  East  to  the 
prairie  states  and  mining  camps.  The  frontier  has 
been  pushed  on  and  still  further  on.  Population  has 
crossed  the  broad  arid  belt  which,  up  to  a  few  years 
ago,  was  known  as  'Hhe  Great  American  Desert." 
It  reached  and  crossed  the  Rocky  Mountains,  in  the 
face  of  the  declaration  of  Thomas  Benton  that  at 
these  mountains  'Hhe  western  limits  of  the  Republic 
should  be  drawn,  and  the  statue  of  the  fabled  god, 


16  PRIVILEGE  AND  DEMOCRACY 

Terminus,  should  be  raised  to  the  highest  peak,  never 
to  be  thrown  down." 

America  has  repeated  the  history  of  other  nations. 
The  desire  to  be  free,  to  satisfy  one's  desires  with  the 
minimum  of  effort,  has  filled  in  the  open  spaces  of 
America  and  is  now  spilling  our  surplus  population 
over  into  Canada  and  Mexico. 

At  last  the  waves  of  population  have  broken  on  the 
Pacific  slope.  But  that  the  hunger  for  land  is  as 
intense  as  ever  is  demonstrated  whenever  an  Indian 
reservation  is  opened  up  to  settlement.  Upon  the 
borders  of  these  reservations,  tens  of  thousands  of 
persons  gather,  impatiently  awaiting  the  signal  to 
enter  and  take  possession  of  the  promised  land. 
Like  an  avalanche  they  pour  in  upon  the  opened  ter- 
ritory, conscious  that  the  few  remaining  acres  of  our 
once  apparently  inexhaustible  domain  are  being 
fenced  in  forever. 

The  West  is  now  enclosed.  The  world-long  drift 
of  peoples  has  finally  come  to  an  end.  It  has  reached 
an  impassable  barrier  in  the  Pacific  Ocean.  The 
free  land  of  the  nation  has  been  taken  up.  There  is 
now  no  homestead  to  be  had  for  the  asking.  The 
frontier  has  only  a  historical  significance.  The 
public  domain  is  almost  wholly  gone.  "The  pubHc 
lands  which  now  remain  are  chiefly  arid  in  character," 
says  the  Public  Land  Commission.*  The  oppor- 
tunity for  a  home,  which  for  three  centuries  has  been 

*  Senate  Document  No.  188,  58th  Congress,  3d  session,  p.  3. 


THE  LURE  OF  THE  LAND  17 

open  to  all,  has  been  finally  closed  by  occupancy  or 
fraudulently  appropriated  by  individuals  and  cor- 
porations in  collusion  with  the  government.  No 
longer  is  America  the  commons  of  the  world.  The 
steady  stream  of  home-seekers  which  for  three  cent- 
uries drifted  across  the  face  of  the  continent,  has 
ceased  to  pass  our  doors. 

This  enclosure  of  the  American  West,  for  three 
centuries  the  ager  puhlicus  of  the  world,  terminated 
the  greatest  single  movement  of  modern  history. 
It  marks  the  close  of  the  first  real  cycle  of  American 
life,  a  cycle  which  has  been  repeating  itself,  at  various 
epochs  in  the  history  of  the  world,  from  the  dawn 
of  Western  civilization.  In  a  big  perspective,  it  may 
be  likened  to  the  fall  of  Rome,  the  opening  up  of  a 
new  route  to  India  by  Vasco  da  Gama,  or  the  dis- 
covery of  America  by  Columbus.  In  so  far  as  it 
affects  America,  it  marks  the  end  of  an  era.  In  so 
far  as  it  brings  to  an  end  twenty  centuries  of  west- 
ward migration,  it  is  revolutionary.  It  marks  a 
turning-point  in  the  world. 


CHAPTER  II 

THE  ECONOMIC  FOUNDATIONS  OF 
DEMOCRACY 

One  need  not  accept  the  materialistic  conception 
of  history  to  find  in  the  free  pubHc  lands  of  America 
the  greatest  single  influence  in  our  life.  Under- 
neath the  surface  the  great  movements  of  democracy 
— political,  social,  industrial — have  been  moulded 
by  the  free  land  and  the  sense  of  freedom  which  it 
awakened  in  all.  To  this  call  every  instinct  of 
democracy  has  been  attuned.  This  has  been  true 
from  the  very  beginning. 

It  is  economic  liberty  that  has  moulded  our  politi- 
cal institutions.  It  is  the  free  public  lands  of  the  West 
that  have  made  us  free.  It  was  this  that  inspired 
the  Declaration  of  Independence,  it  was  this  that 
led  to  the  separation  of  the  colonies  from  England,  it 
is  this  that  has  ever  vitalized  American  democracy. 
We  have  been  taught  that  the  Revolution  was  a  pro- 
test of  Englishmen  against  an  invasion  of  the  rights 
secured  by  Magna  Charta;  that  the  interference  of 
Parliament  with  the  colonist  aroused  the  Anglo- 
Saxon  in  his  new  home  to  a  spirit  of  revolt.  All 
these  things  were  irritating,  it  is  true,  but  the  sense 
of  security  of  the  colonists  was  menaced  in  a  far 

18 


THE  FOUNDATIONS  OF  DEMOCRACY   19 

graver  way.  According  to  a  recent  historian,  it  was 
a  proclamation  of  George  III  that  the  '^hinterland" 
to  the  west  of  the  Alleghany  Mountains  should 
be  closed  to  further  settlement  that  aroused  the 
colonies  to  resistance/  The  settler  had  always 
looked  upon  the  West  as  part  of  his  possessions, 
secured  to  him  by  grants  of  the  Crown  and  confirmed 
by  his  own  sacrifice  and  suffering.  Long  before  the 
French  and  Indian  War  he  had  come  in  conflict 
with  the  French  over  the  region  to  the  west  of  the 
mountains,  and  New  England,  as  well  as  Virginia, 
had  joined  with  the  mother  country  to  drive  a  tra- 
ditional foe  from  the  menacing  position  which  it  oc- 
cupied in  the  rear.  The  American  looked  upon  the 
continent  as  his  own  and,  upon  the  close  of  the  war 
with  France,  he  expected  to  be  confirmed  in  his 
original  grants.  Instead  of  this  George  III  issued  an 
order  forbidding  the  colonists  to  purchase  land  from 
the  Indians,  or  to  make  any  settlements  in  the  re- 
gions acquired  from  France.  The  British  Board  of 
Trade  enforced  this  order.  It  refused  its  consent 
to  petitions  for  land.  By  this  order  the  colonist  was 
limited  to  the  seaboard,  his  dreams  of  economic  inde- 
pendence were  destroyed.  And  it  was  to  preserve 
this  opportunity  to  himself  and  his  children  that  he 
took  up  arms  against  the  mother  country. 

And  just  as  this  instinct  for  freedom  and  the  desire 
for  Western  lands  led  to  war  with  Great  Britain,  so 

^Foundatiom  of  Modern  Europe,  Emil  Reich,  p.  9. 


20  PRIVILEGE  AND  DEMOCRACY 

the  fruits  of  the  war  later  preserved  the  Union.  The 
territory  to  the  west  of  the  Alleghanies  became  the 
property  of  the  Colonies  by  conquest.  The  title  was 
in  dispute.  The  conflicting  claims  of  the  states  were 
finally  settled  by  the  abandonment  of  the  north-west 
territory  to  the  Federal  Government.^  It  became 
the  property  of  the  nation.  The  states  that  were 
born  thereafter  were  children  of  the  Union.  They 
claimed  no  traditions  of  state  sovereignty,  they  had 
no  memories  of  independence.  This  great  territory 
was  a  bond  of  nationality,  which  held  the  states 
together  in  the  years  which  follow^ed.  It  was  an 
ager  publicus,  the  folk-land  of  all  the  people.  It 
cemented  the  nation.  It  gave  the  people  a  common 
interest  and  a  common  purse. 

Just  as  the  public  lands  formed  the  strongest  bond 
of  nationality  in  the  years  when  the  sense  of  union 
was  forming,  so  the  same  public  lands  were  the  pri- 
mary cause  of  the  attempted  dissolution  of  the  Union. 
The  expansion  of  the  West  threatened  the  institution 
of  slavery.  The  new  states  carved  out  of  the  prairies 
disturbed  the  balance  of  power  which  had  thereto- 

^"The  territory  embraced  within  the  present  states  of  Ohio,  In- 
diana, Illinois,  Michigan,  Wisconsin,  and  Tennessee,  that  part  of 
Minnesota  lying  east  of  the  Mississippi  River,  and  all  of  Alabama 
and  Mississippi  lying  north  of  the  thirty-first  parallel  was  held  by 
Massachusetts,  Connecticut,  New  York,  Virginia,  North  Carolina, 
South  Carolina,  and  Georgia  under  grants  from  Great  Britain  during 
their  coloniarcondition.  These  territorial  interests  were  surrendered 
to  the  general  government  of  the  Union  by  the  last  named  states 
.  .  .  and  constituted  the  nucleus  of  our  public  domain."  The  Pub- 
lic Domain,  Donaldson,  p.  10. 


THE  FOUNDATIONS  OF  DEMOCRACY   21 

fore  existed.  The  dominion  of  the  slave  states  in 
Congress  was  jeopardized.  This  was  especially  true 
in  the  Senate.  There  the  commonwealths  enjoyed 
equal  representation.  Even  the  most  solemn  sanc- 
tions of  the  Constitution  could  not  prevent  a  conflict 
between  the  divergent  economic  systems  of  the  North 
and  the  South.  Thus  it  was  that  the  public  land 
united  the  nation  at  a  time  when  it  most  needed 
cohesion,  and  at  a  later  date  threatened  the  dis- 
memberment of  that  which  it  had  so  largely  con- 
tributed to  save. 

The  West  is  the  real  birthplace  of  American  de- 
mocracy. The  seaboard  states  have  ever  been 
aristocratic  in  thought  and  interest.  The  frontier 
jealousy  resented  any  interference  from  a  distance. 
And  the  states  carved  out  of  the  West  have  impressed 
their  influence  on  politics,  industry,  education,  and 
character.  They  came  into  the  Union  with  full  man- 
hood suffrage.  They  exulted  in  their  freedom,  and 
their  note  has  ever  been  one  of  protest,  of  independ- 
ence, of  liberty.  The  West  has  constantly  drawn  to 
itself  the  restless  forces  of  discontent.  Men  crushed 
by  competition  it  has  called.  Men  eager  for  personal 
freedom  it  has  invited.  In  this  sense  the  West  has 
been  the  escape-valve  of  America.  The  buoyancy  of 
our  character  is  traceable  to  the  free  democracy  which 
was  founded  on  a  freehold  inheritance  of  land. 

Our  politics  have  been  quickened  by  this  sense  of 
economic  liberty.    The  attitude  of  the  West  has  been 


22  PRIVILEGE  AND  DEMOCRACY 

that  of  the  pathfinder.  It  is  pioneer-hke  and  feels 
that  the  present  owes  no  obhgations  to  the  past. 
Education  is  highly  cherished.  The  state  univer- 
sities are  close  to  the  people.  The  public  has  an 
affectionate  regard  for  higher  learning  and  utilizes 
its  institutions  in  many  ways  for  the  promotion  of 
local  matters.  Here,  the  girl  looks  forward  to  higher 
education  just  as  does  the  boy,  and  both  attend  col- 
lege together.  In  Colorado,  Wyoming,  Utah,  and 
Idaho  suffrage  has  been  extended  to  women,  while  in 
North  Dakota,  South  Dakota,  Oregon,  Oklahoma, 
Missouri,  and  Montana  democracy  has  popularized 
all  legislation  through  the  initiative  and  referendum. 
The  free  public  lands  have  moulded  industry  no 
less  than  politics.  Free  land  has  determined  the 
scale  of  wages  as  well  as  the  opportunity  for  em- 
ployment. No  man  will  remain  in  another's  employ 
for  less  wages  than  he  can  earn  on  his  own  home- 
stead. And  in  all  new  countries  the  wages  which 
prevail  are  determined  by  what  can  be  produced  on 
the  land  itself.  During  colonial  days,  the  indented 
servant  was  found  along  the  seaboard.  But  no  in- 
denture of  personal  servitude  crossed  the  Alleghany 
Mountains.  There  can  be  no  servitude,  save  that 
of  chattel  slavery,  where  free  lands  are  to  be  had 
by  the  worker.  The  redemptioner  and  the  tenant 
speedily  became  home-owners,  for  free  land  was 
always  to  be  had  just  beyond  the  line  of  settlement. 
Here  was  independence,  and  the  hope  that  was  born 


THE  FOUNDATIONS  OF  DEMOCRACY      23 

of  independence.  Here  was  freedom  from  the  servi- 
tude of  the  master  and  the  landlord.  Here  a  new 
life,  under  new  conditions,  was  open  to  all.  It  is  this 
that  explains  the  high  standard  of  living  that  has 
prevailed  in  America.  It  is  not  due  to  the  protective 
tariff,  it  is  due  to  the  fact  that  the  wage-earner  could 
adopt  another  alternative,  and  an  alternative  that 
left  him  a  free  man.  It  is  this  that  has  determined 
wages  in  America.  It  is  this  that  explains  the  gen- 
eral well-being  which  prevails  in  all  new  countries. 

''While  free  lands  exist,"  says  Achille  Loria,  the 
celebrated  Italian  economist,  ''that  can  be  cultivated 
by  labor  alone,  and  when  a  man  without  capital  may, 
if  he  choose,  establish  himself  upon  an  unoccupied 
area,  capitalistic  property  is  out  of  the  question:  as 
no  laborer  is  disposed  to  work  for  a  capitalist  when 
he  can  labor  on  his  own  account  upon  land  that 
costs  him  nothing.  Evidently,  therefore,  while  such 
conditions  prevail,  the  laborers  will  simply  take  pos- 
session of  the  free  lands  and  apply  their  labor  to  the 
soil,  adding  to  this  the  capital  they  accumulate.  "* 

This  is  what  occurred  in  America.  It  was  free 
land  that  raised  the  American  wage-earner  above  the 
laborer  of  Europe.  It  was  the  amount  produced 
upon  the  free  land  that  determined  wages.  This  con- 
trolled wages  in  all  other  industries.  It  was  this 
that  raised  our  workers  to  industrial  efficiency.  It 
was  this  hope  that  has  made  them  resourceful.    Up 

•  Economic  Foundations  of  Society,  p.  2. 


24  PRIVILEGE  AND  DEMOCRACY 

to  very  recently  the  wage-earner  always  dreamed  of 
a  larger  success.  The  free  land  of  the  West  is  also 
responsible  for  America's  industrial  eminence.  It 
is  the  coal  and  the  iron,  the  copper  and  the  oil,  the 
wheat,  corn  and  cotton  fields  of  the  West  and  South 
that  have  given  us  supremacy.  It  is  not  protec- 
tion, it  is  freedom  of  trade  between  our  states  and 
freedom  of  access  to  the  resources  of  the  earth  that 
awakened  industry.  It  was  a  free  field  open  to  all 
that  developed  our  powers.  It  built  our  railroads, 
telegraphs,  and  telephones;  it  girded  the  earth  with 
steamships  and  revolutionized  all  industry.  It 
placed  the  wheat-fields  of  the  Dakotas  alongside  of 
the  mills  and  factories  of  old  England.  It  built  our 
cities;  it  gave  diversity,  strength,  and  independence 
to  life  and  character. 

The  generation  which  closed  with  the  century 
was  one  of  intense  competition  and  splendid  achieve- 
ment. It  was  a  generation  devoted  to  harnessing 
nature  to  the  service  of  man.  It  brought  forward 
the  captains  of  industry.  They  were  men  familiar 
with  every  process  from  the  bench  to  the  counting- 
room.  Human  talent  enjoyed  an  opportunity  un- 
paralleled in  the  history  of  the  world.  Democracy 
at  work  on  the  undeveloped  resources  of  the  country 
produced  an  array  of  men,  masters  of  their  craft  and 
leaders  in  their  respective  communities. 

There  is  no  more  conclusive  demonstration  of  the 
economic  basis  of  all  life,  of  all  progress,  of  all  civil- 


THE  FOUNDATIONS  OF  DEMOCRACY   25 

ization,  in  fact,  than  the  history  of  the  development 
of  America.  It  was  not  poUtical,  it  was  economic 
Hberty  that  made  America  what  she  is.  It  mat- 
tered not  from  what  section  of  the  earth  men  came 
or  what  their  previous  environment  had  been,  those 
of  force  pushed  their  way  to  the  fore  and  grew  strong 
by  contact  with  obstacles  in  a  way  that  suggests 
the  achievements  of  Drake  and  Hawkins,  whose 
daring  exploits  opened  the  way  for  the  expansion 
of  England  over  distant  seas.  It  was  economic 
opportunity  that  made  the  American  people  what 
they  are.  It  was  our  unparalleled  resources  that 
gave  us  a  position  of  industrial  supremacy.  The 
leaders  of  the  age  came  up  from  the  sod  and  the  mill. 
They  did  so,  not  because  they  were  politically  free, 
but  because  they  were  industrially  free. 

That  which  is  true  of  America  is  true  of  the  world. 
In  the  last  analysis  the  institutions  of  a  people  are 
but  the  reflection  of  the  economic  foundations  upon 
which  they  are  laid.  This  is  true  of  politics,  of  in- 
dustry, of  morals,  of  religion.  A  people's  destiny  is 
determined  by  its  economic  environment.  And  the 
relation  of  the  people  to  the  land  is  the  controlling 
influence  of  all  else.  A  nation  of  home-owners  is  es- 
sentially free,  no  matter  what  the  political  forms  of 
the  state  may  be.  Such  a  people  is  bound  to  be 
democratic.  All  history  bears  witness  to  this  fact. 
It  is  the  difference  in  the  method  of  land  tenure  that 
explains  the  political  as  well  as  the  social  institu- 


26  PRIVILEGE  AND  DEMOCRACY 

tions  of  modern  Europe.  The  countries  of  Switzer- 
land, Holland,  Denmark,  France,  and  south  Ger- 
many are  countries  in  which  widely  distributed 
ownership  prevails.  On  the  other  hand,  Prussia, 
Great  Britain,  and  Russia  are  still  feudal  to  the  core. 
It  is  the  difference  in  the  relation  of  these  peoples  to 
the  land  on  which  they  dwell  that  explains  the  es- 
sential democracy  of  the  former  countries  and  the 
caste  and  aristocracy  of  the  latter.  The  social  posi- 
vion  and  political  power  of  the  ruling  classes  in  the 
latter  countries  are  due  to  their  economic  rather  than 
to  their  political  privileges.  The  privileged  orders  are 
weakest  where  the  land  is  most  widely  distributed; 
they  are  strongest  where  the  feudal  system  is  least 
impaired.  If  a  nation  is  reared  upon  land  monop- 
oly its  political  institutions  will  reflect  monopoly. 
They  are  bound  to  be  aristocratic.  Those  who  own 
the  land  will  own  the  government.  And  wherever 
the  people  are  industrially  free,  wherever  they  own 
their  own  homes,  political  institutions  will  reflect 
that  freedom. 

With  the  enclosure  of  the  land  a  change  has  come 
over  the  spirit  of  our  life.  Population  is  crowding 
in  upon  the  cities.  The  energetic  wage-earner,  who 
formerly  followed  the  western  trail,  is  now  entering 
the  trades-union.  Here  he  finds  expression  for  the 
energy  which  formerly  found  an  outlet  in  the  West. 
It  is  this  that  explains  the  present  industrial  un- 
rest.    It  is  this  that  accounts  for  the  political  fer- 


THE  FOUNDATIONS  OF  DEMOCRACY      27 

merit.  No  longer  can  the  discontented  improve  his 
fortunes  in  another  longitude.  He  must  remain  at 
home  as  a  tenant  or  a  wage-earner.  The  alternative 
of  a  homestead,  which  for  three  centuries  relieved 
the  pressure  of  the  world,  is  now  closed  forever. 

Such  is  the  significance  of  the  American  West. 
Such  are  some  of  its  contributions  to  our  life.  And 
this  development  of  ours  is  not  an  isolated  phenome- 
non. It  is  but  a  reflection  of  that  which  has  gone 
before. 

Thus  it  is,  as  Loria  has  said,  that  America  offers  a 
key  to  the  enigma  which  Europe  has  sought  for  cent- 
uries in  vain.  Thus  the  land  which  has  no  history 
reveals  the  course  of  universal  history.  For  just  as 
the  frontier  offers  a  mirror  in  which  the  political, 
social,  and  industrial  conditions  of  colonial  times 
may  be  studied,  so  America  offers  a  mirror  of  the 
evolution  of  the  western  world  from  the  expansion 
of  Rome  down  to  date.  So,  too,  the  conditions 
which  the  countries  of  Europe  now  present,  disclose 
to  us  the  problems  which  we  ourselves  must  pres- 
ently face. 


CHAPTER  m 
THE  RAPE  OF  THE  NATION 

We  have  seen  that  the  settlement  of  America  was 
but  the  final  act  in  a  drama,  whose  beginnings  coin- 
cide with  the  dawn  of  Western  civilization.  Century 
by  century  the  process  of  nation-building  has  re- 
peated itself,  even  the  details  being  the  same.  This 
has  been  true  in  the  enclosure  of  the  American  West. 
The  experiences  of  Rome,  of  feudal  Europe,  of 
England,  and  of  Ireland  have  been  reproduced  in 
almost  every  line  of  our  public  land  policy. 

When  the  Federal  Constitution  was  adopted  the 
United  States  was  the  undisputed  owner  of  almost 
all  the  land  between  the  Alleghany  Mountains  and 
the  Mississippi  River.  This  territory  formed  the  first 
public  land  of  the  nation.  The  Louisiana  purchase 
added  1,182,000  square  miles  to  this  domain,  which 
was  confirmed  as  to  the  Oregon  country  by  the  ex- 
plorations of  Lewis  and  Clark.  The  acquisition  of 
Florida  increased  the  public  lands  by  54,000  square 
miles,  while  the  Gadsden  purchase,  by  means  of 
which  the  southern  part  of  Arizona  was  acquired, 
added  25,000  square  miles  more.  Texas,  with  an 
area  of  265,000  square  miles,  was  annexed  in  1845; 
but  as  this  territory  had  been  temporarily  independ- 

28 


THE  RAPE  OF  THE  NATION  29 

ent,  its  unoccupied  lands  did  not  become  part  of  the 
public  domain.  Leaving  out  of  consideration  the 
recently  acquired  Pacific  islands,  the  total  area  of 
the  public  domain  of  the  United  States  amounted  to 
1,849,072,587  acres,  or  about  3,000,000  square  miles. 
Its  cost  to  the  nation  was  four  and  seven-tenths  cents 
an  acre.^  This  land  was  the  unencumbered  posses- 
sion of  the  people.  America  was  the  greatest  land- 
lord in  the  world. 

No  such  opportunity  was  ever  offered  to  any  ^ 
people.  One  cannot  help  dreaming  of  the  America  \ 
that  might  have  been  had  this  imperial  domain  been  \ 
retained  as  the  common  possession  of  the  nation. 
Had  the  government  reserved  the  title,  and  leased 
the  land  under  proper  protection  for  improvements 
in  such  quantities  and  as  increasing  population  re- 
quired, involuntary  poverty  need  never  have  ap- 
peared among  us,  while  homes  for  unnumbered 
millions  would  still  be  waiting  in  the  prairies  to 
the  west  of  the  Mississippi  River.  Under  such  a 
policy  there  would  have  been  no  million-acre  estates 
held  for  speculation  and  idle  uses.  The  Pacific 
railroads  would  not  have  acquired  a  twelfth  of  the 
total  public  domain.  Instead  of  a  nation  in  which 
one-half  of  the  people  have  no  homes  of  their  own 
there  would  have  been  ample  abiding-places  for 
many  times  our  present  number.  For  were  America 
settled  as  densely  as  is  France,  there  would  be  room 

» The  Public  Domain,  Donaldson,  pp.  14,  21. 


30  PRIVILEGE  AND  DEMOCRACY 

for  480,000,000  people  instead  of  one-sixth  that 
number.  Were  the  population  no  denser  than  it 
is  in  Germany,  there  would  be  accommodation  for 
800,000,000  people.  For  the  empire  of  Germany 
could  be  laid  across  the  face  of  Texas  and  still 
leave  unoccupied  an  area  three  times  the  size  of 
Switzerland. 

America  could  support  five  times  its  present  popu- 
lation in  far  greater  comfort  than  that  now  enjoyed 
by  a  large  portion  of  the  people,  had  the  public 
lands  been  allotted  only  as  the  needs  of  the  people 
demanded.  For  the  resources  of  America  surpass 
those  of  all  Europe.  Had  the  nation  reserved  the 
title  of  the  land  and  leased  it  to  users,  the  colossal 
fortunes  that  have  been  contributed  to  the  owners 
of  city  and  suburban  sites  would  have  remained  in 
the  hands  of  the  people.  The  same  is  true  of  the 
mineral  resources.  Instead  of  enriching  a  handful 
of  men,  who  control,  but  do  not  develop,  the  iron, 
the  coal,  the  copper,  the  oil,  and  the  natural  gas 
deposits,  these  resources  would  have  remained  the 
common  heritage  of  us  all.  By  means  of  periodic 
revaluations  of  the  rental  value  we  could  have  dis- 
pensed with  all  other  taxes  and  maintained  ourselves 
in  affluence  out  of  the  increasing  rents  and  royalties 
of  the  public  lands.  The  mineral  deposits  could  have 
been  leased  to  private  operators,  just  as  many  of 
them  are  to-day  by  their  owners,  and  worked  under 
such  conditions  as  the  Government  saw  fit  to  impose. 


THE   RAPE  OF  THE  NATION  31 

Under  such  restrictions  no  billion-dollar  monopolies 
would  have  been  created,  competition  would  have 
continued  as  in  other  lines  of  industry,  while  the 
recurring  wars  of  capital  and  labor  would  have  been 
forever  impossible. 

Had  such  a  policy  been  pursued,  opportunity 
would  still  exist  for  unborn  generations.  In  such  a 
nation  there  would  be  no  landlords  and  no  tenants. 
The  tenement  and  the  slum  would  never  have  ap- 
peared with  the  disease,  poverty,  and  vice  which  they 
inevitably  produce.  Crime  would  have  remained  at 
a  minimum,  for  crime  is  the  product  of  poverty  and 
the  lack  of  opportunity  to  work.  In  such  a  society 
wages  would  have  been  determined  by  the  will  of  the 
worker,  for  opportunity  would  still  be  calling  in  the 
unoccupied  prairies  of  the  public  domain.  Then 
labor  w^ould  have  the  alternative  to  work  for  itself. 
And  this  is  always  the  determining  factor  in  the 
fixing  of  wages. 

There  is  nothing  extraordinary  about  such  a  policy. 
It  is  not  even  difficult  of  execution.  The  Govern- 
ment has  adopted  just  such  a  method  in  dealing  with 
the  land  of  the  Indian  tribes  of  Oklahoma.  It  has 
probably  not  been  carried  out  with  any  critical  jus- 
tice for  the  Indians  and  yet  the  returns  from  this 
source  are  colossal.^ 

*  The  government  has  treated  the  Indians  as  its  wards  and  leased 
their  lands  on  a  royalty  basis.  The  Osage  Indians  number  2,230. 
Their  reservation  amoimts  to  1,470,000  acres.  From  this  source,  by 
means  of  grazing,  oil  and  gas  royalties,  the  selling  of  lots,  and  interest 


32  PRIVILEGE  AND  DEMOCRACY 

But  no  such  vision  has  guided  our  policy.  To  be 
quickly  rid  of  our  resources  and  on  any  terms  has 
been  a  consuming  passion  with  us.  Human  inge- 
nuity could  scarcely  have  devised  a  more  wasteful 
policy  than  that  which  has  been  pursued.  This 
was  especially  true  during  the  decade  which  fol- 
lowed the  Civil  War.  No  demand  on  the  part  of 
the  interests  powerful  in  Congress  was  too  extrav- 
agant to  receive  attention.  It  is  estimated  that 
up  to  the  year  1890,  337,740,080  acres  of  the  public 
lands  were  granted  to  corporations  and  states  for 
wagon  roads,  canals,  river  improvements,  and  rail- 
roads.^    This  is  an  empire  equal  to  one-sixth  of 

on  funds,  the  income  of  the  tribe  for  the  fiscal  year  1907  amounted  to 
$1,351,577.66,  or  $606  for  every  man,  woman,  and  child  in  the  tribe. 
This  is  equivalent  to  nearly  $3,000  a  family.  The  royalty  on  the  oil- 
wells  is  one-eighth  of  all  the  oil  produced.  The  royalty  on  gas  is 
$100  per  annum  for  each  gas-well  in  operation.  The  land  belonging 
to  the  tribe  is  leased  for  a  limited  period  subject  to  re-appraisal. 
A  similar  policy  has  been  adopted  as  to  other  tribes.  During  the 
fiscal  year  1907,  the  government  collected  for  the  Choctaw  and 
Chickasaw  Indians  the  sum  of  $052,875,  from  coal  and  other  royal- 
ties, and  from  the  selling  of  town  lots.  The  royalties  and  other 
collections  for  the  Cherokee  nation  amounted  to  $731,315.60, 
and  for  the  Creek  nation  the  sum  of  $237,245.99.  In  ten  years' 
time,  the  coal  and  asphalt  royalties  of  the  Choctaw  and  Chick- 
asaw nations  amounted  to  $1,975,972.62.  The  total  enrolled 
population  of  the  Choctaw,  Chickasaw,  and  Cherokee  and  Creek 
Indians  was  98,000  and  the  amount  which  they  received  from  the 
administration  of  their  estates  by  the  government  in  the  form  of 
ground-rent  for  the  year  1907  amounted  to  $150  for  every  family 
of  five  in  the  reservation.  See  annual  reports  of  the  Secretary  of 
the  Interior. 

»"The  Populist  Movement,"  by  F.  L.  McVey,  Economic  Studies 
(American  Economic  Association),  Vol.  I,  p.  153.  A  large  part  of 
these  grants,  however,  was  never  actually  patented  by  the  grantees. 


THE  RAPE  OF  THE  NATION  33 

the  total  area  of  the  United  States,  including  moun- 
tain and  desert  lands  as  well  as  the  territory  of 
Alaska.  It  is  an  area  ten  times  the  size  of  Iowa, 
and  three  times  the  size  of  France,  with  its  popu- 
lation of  39,000,000  souls. 

A  carnival  of  prodigality  attended  the  construc- 
tion of  the  Pacific  railways.  They  took  what  they 
wanted  of  the  public  domain.  In  addition  to  a 
right  of  way  across  the  continent  of  from  100  to 
400  feet  wide,  with  such  land  as  was  needed  for 
sidings,  stations,  yards,  and  the  like,  a  subsidy  of 
eveiy  alternate  section  of  one  square  mile  each 
on  either  side  of  the  right  of  way  was  added  as 
an  aid  to  construction.  The  subsidy  to  the  North- 
ern Pacific  Railway  consisted  of  alternate  odd-num- 
bered sections  to  the  amount  of  twenty  alternate 
sections  per  mile  on  each  side  of  the  road  where 
the  line  passed  through  the  territories,  and  ten 
alternate  sections  per  mile  on  each  side  where  it 
passed  through  the  states,  extending  from  the  west- 
ern boundary  of  Minnesota  to  Puget  Sound  and  the 
Columbia  River. 

It  is  difficult  to  tell  the  amount  of  land  that 
was  authorized  by  these  grants.  It  is  even  more 
difficult  to  ascertain  the  amount  that  was  actually 
patented  by  the  railways.  The  land  originally 
granted  has  been  estimated  at  215,000,000  acres. 
The  official  estimate  of  the  Government  Land  Office 
is  somewhat  less.     It  reports  the  grants  at  155,514,- 


34  PRIVILEGE  AND   DEMOCRACY 

994,000  *  acres,  and  the  area  actually  patented  by  the 
railroads  as  73,942,260  acres.  This  does  not  include 
38,000,000  acres  granted  to  the  railways  by  the  state 
of  Texas. 

But  the  land  grants  were  not  the  only  help  which 
the  railroads  received.  A  loan  of  $60,000,000  was 
made  to  the  Pacific  railroads  as  an  additional  aid  to 
their  construction.  This,  of  itself,  would  have  built 
over  2,000  miles  of  railway  across  the  continent. 
It  would  have  saved  a  great  portion  of  the  West 
from  railway  monopoly  forever  and  have  furnished 
a  standard  by  which  rates  and  services  for  the  rest 
of  the  country  could  have  been  measured.^ 

Scandals  of  many  kinds  arose  through  the  dealings 
of  the  Pacific  railways  with  Congress.  These  are  the 
dangers  always  alleged  to  be  incident  to  government 
ownership.  Yet  we  are  in  a  position  to  make  a  com- 
parison of  the  relations  of  the  government  with  the 
Pacific  railways  with  its  experience  in  the  construc- 

*  The  Public  Domain,  Donaldson,  p.  268. 

E.  Benjamin  Andrews,  in  The  United  States  in  Our  Own  Times, 
chap.  4,  gives  the  land  grants  to  the  six  Pacific  railroads  as  follows: 

Union  Pacific  Railroad 13,000,100  acres 

Central       "  "  12,100,100     " 

Northern   "  "  47,000,000     " 

Kansas       "  "  6,000,000     " 

Atlantic  and  Pacific  Railroad 42,000,000     " 

Southern  Pacific  Railroad 9,520,000     " 

129,620,200  acres 
2  "The  Secretary  of  Interior  stated : '  The  entire  road  (the  Northern 
Pacific)  when  completed,  2,700  miles,  will  have  cost  about  $75,000,- 
000  or  at  the  rate  of  $28,000  a  mile.'  "—The  Public  Domain,  p.  887. 


THE  RAPE  OF  THE  NATION  35 

tion  of  the  Panama  Canal,  which  is  being  built  by 
the  nation  itself. 

There  has  been  no  scandal,  no  bribery,  no  control 
of  political  parties  in  connection  with  the  latter  en- 
terprise, for  there  is  no  great  interest  to  corrupt  the 
government.  But  the  Pacific  railways  were  given 
land  enough  alone  to  more  than  pay  the  cost  of 
their  construction.  According  to  conservative  esti- 
mates the  grants  of  the  Northern  Pacific  Railway 
alone  were  worth  a  thousand  million  dollars.^  Had 
the  land  been  sold  by  the  government  to  settlers, 
who  later  purchased  it  from  the  railroads,  five  and 
possibly  ten  transcontinental  railways  could  have 
been  built  from  the  proceeds  of  this  grant.  But 
this  is  only  the  initial  loss.    Ever  since  the  grants 

• "  Mr.  Wilson,  for  many  years  the  Commissioner  of  the  Land  De- 
partment of  the  Illinois  Central  Railroad,  .  .  .  thought  that  if  prop- 
erly managed  the  Northern  Pacific  land  would  build  the  entire  road 
connecting  the  then  terminus  of  the  Grand  Trunk  through  to  Puget 
Sound,  the  head  of  navigation  on  the  Columbia,  fit  out  an  entire 
fleet  of  sailing  vessels  and  steamers  for  the  China,  East  India,  and 
coasting  trade,  and  leave  a  surplus  that  would  roll  up  to  millions. 
He  deemed  the  probable  value  of  the  grant  $990,000,000,  its  pos- 
sible value  $1,320,000,000.  "—The  United  States  in  Our  Own  Times, 
E.  Benjamin  Andrews,  chap.  4. 

If  this  estimate  of  the  value  of  the  Northern  Pacific  land  grants  is 
anywhere  near  correct  and  the  cost  of  its  building  was  not  in  excess 
of  $75,000,000,  as  estimated  by  the  Secretary  of  the  Interior,  ten 
transcontinental  systems  could  have  been  built  out  of  the  sale  of  the 
lands  and  still  leave  a  surplus.  The  Union  Pacific  Railroad  received 
an  average  of  $4.42  per  acre  for  its  land  up  to  1879.  At  this  price 
the  Northern  Pacific  would  have  received  $207,740,000,  or  enough 
to  have  built  three  systems. 

An  exhaustive  investigation  of  this  grant  was  made  by  a  com- 
mittee of  Congress,  which  reported  that  the  entire  cost  of  the  North- 


36  PRIVILEGE  AND  DEMOCRACY 

were  made  the  government  has  been  honeycombed 
with  the  corrupting  influences  which  have  grown  out 
of  the  relationship.  For  years  the  Land  Depart- 
ment has  been  struggHng  to  recover  milHons  of  acres 
of  agricultural,  grazing,  mineral,  and  timber  lands, 
which  have  been  fraudulently  enclosed,  in  addition 
to  the  grants  which  the  railways  rightfully  enjoy. 
The  states  of  the  West  and  the  Federal  employees 
have  been  corrupted  by  the  same  influences,  while 
the  whole  nation  is  struggling  under  fictitious  rail- 
way capitalization,  inadequate  trackage,  insufficient 
shipping  facilities,  and  excessive  charges.  Had 
Congress  constructed  the  roads  itself,  had  the  nation 
been  plundered  by  the  most  corrupt  of  contractors, 
it  would  still  have  received  an  immeasurably  greater 
return  than  it  has  enjoyed  under  the  policy  which 
was  pursued. 

At  the  time  these  subsidies  were  granted  public 
opinion  was  quieted  by  the  assertion  that  only  by 

ern  Pacific  had  been  paid  for  out  of  the  land  grants,  estimating  the 
land  as  only  worth  $3.00  an  acre,  and  that  a  surplus  of  $41,284,000 
remained  for  the  company.  The  committee  said  in  its  report  to 
Congress:  "The  undersigned  suppose  that  all  that  could  be  asked  of 
the  government  in  the  exercise  of  the  most  prodigal  generosity  would 
be  a  sufficient  amount  of  lands  to  enable  the  company  to  construct 
its  road  without  costing  it  a  single  dollar  of  its  own  money,  and  as 
either  of  the  foregoing  hypotheses  shows  a  surplus  of  many  millions 
more  than  are  necessary  for  that  purpose  it  has  occurred  to  them 
that  it  might  be  to  the  interest  of  the  people  of  the  United  States 
generally  to  look  somewhat  after  the  surplus,  whatever  it  may  be. 
.  .  .  There  are  no  good  reasons  yet  apparent  why  the  people  should 
pay  the  cost  of  its  construction  and  present  the  company  with  a 
colossal  fortune  besides. " — The  Public  Domain,  Donaldson,  p.  889. 


THE  RAPE  OF  THE  NATION  37 

these  means  would  the  West  be  peopled,  and  that 
through  this  settlement  the  remaining  land  would  be 
greatly  increased  in  value.  To  some  extent  this  has 
been  true.  The  railways  were  built  some  years 
earlier  than  they  otherwise  would  have  been.  And 
land  values  were  increased  in  consequence.  But  the 
price  has  been  a  fearfully  costly  one.  Large  parts 
of  the  West  have  been  strangled  in  consequence. 
Millions  of  acres  are  still  held  by  the  railroads  for 
speculative  purposes,  while  great  manorial  estates, 
with  hired  men  and  a  tenant  class,  are  to  be  found 
wherever  the  railway  grants  were  made.  Out  of  these 
subsidies  the  bonanza  farms  of  ten,  twenty,  one 
hundred  thousand,  and  even  a  million  acres  have 
been  carved.  Many  of  these  great  feudatories  cover 
whole  counties.  Some  of  them  are  larger  than  an 
Eastern  state. ^ 

Land-grabbers  and  ranchmen  followed  close  behind 
the  railways  and  appropriated  great  tracts  of  land 

'  As  instances  of  the  great  estates  which  are  to  be  found  in  almost 
every  state  of  the  West,  many  of  which  were  made  possible  by  the 
railway  land  grants,  the  following  may  be  cited:  "The  Texas  Land 
Syndicate  No.  3  owns  3,000,000  acres  in  Texas,  in  which  such  English 
noblemen  as  the  Duke  of  Rutland  and  Lord  Beresford  are  largely 
interested.  Another  syndicate,  the  British  Land  Company,  owns 
300,000  acres  in  Kansas,  besides  tracts  in  other  places.  The  Duke 
of  Sutherland  owns  hundreds  of  thousands  and  Sir  Edward  Reid 
controls  1,000,000  acres  in  Florida.  A  syndicate  containing  Lady 
Gordon  and  the  Marquis  of  Dalhousie  controls  2,000,000  acres  in 
Mississippi." — The  Menace  of  Privilege,  by  Henry  George,  Jr.,  p.  36. 

In  addition  to  these  the  Marquis  of  Tweeddale  owns  1,750,000 
acres,  Phillips,  Marshall  &  Co.  (London),  1,300,000  acres,  the 
Scully  estate  2,000,000  P-cres,  the  Holland  Land  Co.  4,500,000  acres, 

208095 


38  PRIVILEGE  AND  DEMOCRACY 

from  which  they  refuse  to  be  dislodged.  The  rail- 
roads themselves  have  kept  great  areas  out  of  use. 
The  alternate  sections,  checker-boarded  within  the 
limits  of  the  railway  grants,  have  been  fenced  in. 
Actual  settlers  are  denied  access  to  them.  By  virtue 
of  the  lieu  land  laws,  the  railways  are  permitted  to 
substitute  new  sections  for  those  which  the  govern- 
ment has  reserved  for  schools,  forests,  and  other 
purposes.  This  power  is  used  to  cloud  titles.  By 
means  of  it  mineral  claims,  developed  by  honest  pros- 
pectors, are  appropriated  under  some  claim  of  title, 
and  men  who  have  spent  their  lives  in  the  develop- 
ment of  a  property  are  forcibly  ejected  from  their 
holdings,  or  exhausted  by  the  delays  and  expenses  of 
protracted  legal  controversies.  By  these  and  similar 
means  whole  commonwealths  are  arrested  in  their 
development;  titles  of  property  are  rendered  inse- 
cure, and  great  areas  of  land  are  closed  to  occupancy. 
The  history  of  the  relation  of  the  government  to 
the  Pacific  railways  has  been  one  of  stupendous  folly. 
It  has  been  one  of  the  most  costly  experiences  of  the 
nation.  The  financial  cost  of  the  Civil  War  does  not 
compare  with  the  loss  involved  in  our  land  policy. 
Not  only  were  the  railway  grants  capable  of  sustain- 
ing from  ten  to  twenty  million  people  in  comfort; 
not  only  were  the  forest  and  mineral  resources  bar- 

and  a  German  syndicate  1,100,000  acres.  Fifty-four  individuals 
and  foreign  syndicates  own  26,710,390  acres,  an  area  greater  than 
seven  of  the  more  populous  Eastern  states  with  a  population  of 
8,359,000  people. 


THE  RAPE  OF  THE  NATION  39 

tered  away  in  the  process,  but  the  entire  West  was 
so  involved — poHtically,  socially,  and  industrially — 
that  it  has  remained  as  a  vast  feudatory  to  the  Pacific 
railway  systems.  Its  politics  reflect  the  interests 
which  control  the  railways,  the  land  grants,  and  the 
resources  of  the  country.  In  Congress  and  at  home 
these  interests  struggle  to  stifle  every  expression  of 
real  democracy. 

But  the  tale  of  our  wastefulness  does  not  end  with 
the  railway  land  grants.  Probably  an  even  greater 
area  has  been  stolen  by  persons  and  corporations 
in  conspiracy  with  the  railways  or  the  agents  of  the 
government.  The  extent  of  these  fraudulent  en- 
closures will  probably  never  be  known.  In  a  re- 
cent issue  of  a  popular  magazine  is  a  story  of  a 
poor  German  who  landed  in  this  country  in  1850; 
of  how  he  became  the  owner  of  14,539,000  acres  of 
the  richest  land  in  California  and  Oregon.  His 
enclosures  cover  22,500  square  miles,  an  area  three 
times  as  great  as  the  state  of  New  Jersey  with 
its  population  of  1,500,000  souls.  The  story  tells 
how  one  hundred  men  in  the  Sacramento  Valley 
came  to  own  17,000,000  acres;  of  ranches  of  eight, 
twenty,  and  even  one  hundred  miles  in  extent;  of 
single  estates  twice  the  size  of  Belgium,  bigger 
than  all  Switzerland,  bigger  even  than  the  com- 
bined areas  of  New  Hampshire,  Massachusetts, 
Connecticut,  and  Delaware.^    Other  investigations 

'  Everybody's  Magazine,  May,  1905. 


40  PRIVILEGE  AND  DEMOCRACY 

indicate  that  more  than  150,000,000  acres  have 
been  illegally  or  collusively  appropriated  from  the 
public  domain.* 

It  is  probable  that  from  250,000,000  to  350,000,000 
acres  of  the  public  domain  have  been  granted  to  the 
Pacific  railways  or  illegally  appropriated  by  persons 
and  corporations  in  conspiracy  with  the  agents  of 
the  government.  We  have  no  complete  data  on  the 
subject,  but  the  investigations  made  during  the  ad- 
ministration of  President  Roosevelt,  as  well  as  the 
disclosures  in  the  federal  courts,  indicate  that  a  large 
part  of  the  best  land  of  the  nation  has  been  acquired 
by  dishonest  means.  The  homestead  entries  covering 
a  period  of  forty  years  amount  to  but  111,000,000 
acres.    The    timber,    stone,    desert    land,    lumber 

>  An  exhaustive  study  has  been  made  of  these  operations  by  Mr. 
William  R.  Lighton,  of  Omaha,  Neb.,  and  published  in  the  Boston 

Transcript.     He  says: 

"Within  the  last  fifteen  years  there  has  been  stolen  from  the  public 
domain  not  less  than  150,000,000  acres;  an  area  that  would  make 
thirty  states  of  the  size  of  Massachusetts,  five  states  as  large  as  New- 
York,  or  three  states  as  large  as  Kansas.  When  the  truth  is  known 
— as  it  may  be  by  and  by — these  figures  will  doubtless  be  doubled, 
trebled,  or  quadrupled.  The  present  statement  is  one  justified  by 
present  knowledge.  A  recent  grand-jury  investigation  in  California, 
backed  up  by  other  ofiicial  inquiry,  disclosed  that  one  man  alone  in 
that  state  holds  the  title  to  nearly  15,000,000  acres,  acquired  within 
the  time  named  by  the  flagrant  processes  of  theft.  There  are 
dozens  and  even  scores  of  men  whose  stealings  will  run  from  10,000 
to  1,000,000  acres  or  more,  the  extent  of  their  grabs  depending 
principally  upon  their  ability  to  swing  transactions  to  a  successful 
issue. 

"No  reference  is  made  to  the  solemn,  semi-official  chicanery  of  the 
railroad  land  grants  or  to  the  equally  bald  grants  in  the  South-west, 
glossing  over  earlier  pilferings.    Those  deals  appear  by  comparison 


THE  RAPE  OF  THE  NATION  41 

culture,  and  coal  land  entries  amount  to  but  51,000,- 
000  acres  more;  168,000,000  acres  have  been  with- 
drawn by  the  government  as  forest  preserves,  while 
over  700,000,000  acres  of  mountain  and  desert  lands 
(one-half  of  which  are  in  Alaska)  still  remain  un- 
surveyed.  The  grand  total  of  lands  accounted  for 
by  legal  entry,  authorized  grants,  or  reservations 
falls  short  of  the  total  lands  of  the  nation  by  many 
hundreds  of  millions  of  acres.  By  a  process  of 
elimination  it  should  be  possible  to  ascertain  how 
much  of  the  public  domain  had  been  fraudulently 
appropriated.  But  no  such  inventory  of  our  national 
assets  has  ever  been  taken. 

By  the  processes  indicated,  America  has  been 
despoiled  of  an  empire  greater  than  the  combined 
areas  of  the  thirteen  original  states.  Yet  it  has  ex- 
cited but  momentary  activity  on  the  part  of  the  gov- 

impeccably  honest  and  above  reproach.  This  charge  relates  only 
to  such  downright,  outright,  deliberate  stealings  as  cannot  be  de- 
scribed by  any  other  name,  bearing  no  stamp  of  formal  official 
approval. 

"Wherever  there  is  a  body  of  public  land  large  enough  to  make 
a  bait  worth  swallowing,  there  the  thefts  are  going  on.  Lands  of 
every  description  are  included.  Millions  of  acres  in  the  rich  wheat 
valleys  of  California  have  been  stolen;  millions  of  acres  of  grazing 
lands  on  the  plains  of  Kansas,  Nebraska,  Dakota,  Wyoming,  and 
Montana  have  been  stolen,  not  to  mention  the  earlier  stealings  in  the 
now  almost  devastated  timber  regions  of  Michigan,  Wisconsin,  and 
Minnesota;  and  now  the  lumber  thieves  are  plying  their  shameless 
trade  unhindered  in  the  new  fields  of  Mississippi  and  other  unde- 
veloped districts  of  the  South;  unnumbered  acres  of  mineral  land 
have  been  stolen — in  fact,  nothing  worth  stealing  has  escaped  the 
clutch  of  these  bold  outlaws. "  See  issues  of  Boston  Transcript  of 
May  20  and  27,  June  3,  10,  17,  and  24,  and  July  1,  1905. 


42  PRIVILEGE  AND  DEMOCRACY 

ernment  and  aroused  only  isolated  protests  on  the 
part  of  the  press.  Had  some  foreign  power  laid  its 
hands  upon  one  of  the  most  worthless  of  our  Pacific 
islets,  the  nation  would  have  burst  forth  into  a  de- 
mand for  war  with  all  of  its  devastating  cost  in  life 
and  treasure. 

It  may  be  suggested  that  the  reports  to  which 
reference  has  been  made  are  the  unscientific  investi- 
gations of  magazine  writers.  But  official  documents 
show  conclusively  the  growth  of  land  monopoly  and 
the  questionable  methods  employed  to  acquire  pos- 
session of  the  public  domain. 

The  Public  Lands  Commission,  appointed  by  Presi- 
dent Roosevelt,  after  an  exhaustive  inquiry,  says: 

''Detailed  study  of  the  practical  operation  of  the 
present  land  laws  shows  that  their  tendency  far  too 
often  is  to  bring  about  land  monopoly  rather  than  to 
multiply  small  holdings  by  actual  settlers. 

".  .  .  Not  infrequently  their  effect  is  to  put  a 
premium  on  perjury  and  dishonest  methods  in  the 
acquisition  of  land.  It  is  apparent,  in  consequence, 
that  in  very  many  localities,  and  perhaps  in  general, 
a  larger  proportion  of  the  public  land  is  passing  into 
the  hands  of  speculators  than  into  those  of  actual  set- 
tlers who  are  making  homes.  .  .  .  Nearly  everywhere 
the  large  land-owner  has  succeeded  in  monopolizing 
the  best  tracts,  whether  of  timber  or  agricultural  land. 
.  .  .  Your  commission  has  had  inquiries  made  as  to 
how  a  number  of  estates  selected  haphazard  have 
been  acquired.  Almost  without  exception  collusion  or 
evasion  of  the  letter  and  spirit  of  the  laws  was  involved. 
It  is  not  necessarily  to  be  inferred  that  the  present 


THE  RAPE  OF  THE  NATION  43 

owners  of  these  estates  were  dishonest,  but  the  fact 
remains  that  their  holdings  were  acquired  or  con- 
sohdated  by  practices  which  cannot  be  defended. "  * 

The  growth  of  land  monopoly  and  the  proportions 
which  it  has  already  attained  are  confirmed  beyond 
any  question  by  the  United  States  Census.  These 
statistics  tell  a  story  quite  as  convincing  as  the  more 
dramatic  reporting  of  contemporary  literature.  From 
the  Census  returns  of  1900  it  appears  that  of  the 
841,000,000  acres  of  land  under  cultivation  in  the 
United  States,  200,000,000  acres  are  in  farms  whose 
average  size  is  4,230  acres.  These  farms  are  owned 
by  47,276  persons.  One-fourth  of  the  total  acreage 
of  America  is  owned  by  .0006  of  the  population.  The 
area  so  owned  is  considerably  greater  than  the  com- 
bined area  of  Germany  and  Great  Britain.  These 
nations  support  a  population  of  100,000,000  souls. 
Yet  here  in  America  a  quarter  of  the  cultivated 
land  is  owned  by  a  handful  of  persons,  whose  total 
number  is  less  than  that  of  a  good-sized  suburb  of 
an  Eastern  city. 

So  far  as  future  generations  are  concerned,  it  is  a 
matter  of  indifference  whether  these  colossal  holdings 
were  obtained  by  fraud  or  by  honest  means.  Mo- 
nopoly is  as  oppressive  in  one  instance  as  in  the 
other.  However  they  may  have  been  acquired, 
the  opportunity  to  make  provision  for  the  future  has 
passed  from  us.    This  is  a  fact  of  portentous  sig- 

'  Senate  Document  No.  154,  58th  Congress,  3d  Session,  p.  14. 


44  PRIVILEGE  AND  DEMOCRACY 

nificance.  For  man  is  a  land  animal.  Upon  the 
land  all  life  depends.  From  it  humanity  draws  its 
strength  just  as  did  the  mythological  Antaeus. 
Everything  that  man  consumes  comes  from  the  land. 
And  the  tribute  which  must  now  be  paid  by  those 
who  toil  to  those  who  own  the  land  is  determined  by 
the  law  of  demand  and  supply,  population  ever  in- 
creasing, land  ever  constant  and  limited  in  amount. 


CHAPTER  IV 
THE  STRANGLE  HOLD  OF  MONOPOLY 

We  have  been  prodigal  beyond  measure  with  our 
public  lands,  but  we  have  been  criminally  wasteful  in 
the  disposal  of  our  mineral  resources.  The  face  of 
the  continent  is  underlaid  with  coal,  iron,  copper, 
petroleum,  natural  gas,  lead,  zinc,  gold,  silver,  and 
other  mineral  deposits.  Many  of  these  minerals  are 
almost  as  accessible  as  the  air  above,  and  only  less 
inexhaustible.  Nature  set  no  limit  to  the  generos- 
ity of  her  endowments.  Not  alone  agriculture,  but 
every  conceivable  industry  was  provided  for,  as 
though  Providence  had  contemplated  that  in  this 
new  continent,  a  new  race,  free  from  the  mistakes  of 
the  past,  might  try  again  the  experiment  of  nation- 
building. 

Yet  within  a  generation  these  great  gifts  have 
been  appropriated.  They  are  owned  against  the 
claims  of  generations  as  yet  unborn.  This  owner- 
ship is  not  primarily  for  use,  it  is  not  for  enjoyment, 
it  is  for  the  purpose  of  excluding  others  who  would 
use  them  from  the  opportunity  of  doing  so.  This 
monopoly  of  the  resources  of  the  country  is  as  por- 
tentous to  our  life  as  is  the  enclosure  of  the  land 
itself.     For  the  civilization  of  the  future  is  an  indus- 

45 


46  PRIVILEGE  AND  DEMOCRACY 

trial  one,  and  it  is  upon  the  raw  materials  of  pro- 
duction that  the  life  of  to-morrow  depends. 

Men  are  still  living  whose  memory  goes  back  to  the 
first  timid  experiments  in  the  mining  of  anthracite 
coal.  These  ranges  are  limited  to  a  small  area  in 
north-eastern  Pennsylvania.  But  a  comparatively 
few  years  ago  the  region  was  of  little  value.  It  is 
still  covered  with  scrubby  forests  and  is  little  suited 
to  cultivation.  Yet  these  barren  mountain-sides 
have  been  capitalized  at  hundreds  of  millions  of 
dollars.  Shipments  of  coal  have  reached  an  annual 
aggregate  of  over  70,000,000  tons.^  The  labor  cost 
at  the  mouth  of  the  mine,  as  evidenced  by  testimony 
presented  to  the  Interstate  Commerce  Commission, 
is  less  than  $2.00  per  ton.  The  freight  rate  to  the 
seaboard  is  $1.55  per  ton.  The  price  to  the  consumer 
at  tidewater  is  over  $6.00  per  ton.^ 

Upon  this  supply  of  coal  the  entire  Eastern  sea- 
board, as  well  as  a  large  part  of  the  central  West,  is 
dependent  for  light,  heat,  and  power.  Over  ninety- 
six  per  cent,  of  the  mines  are  owned  or  controlled  by 
the  eight  great  railroads  which  enter  the  region,  and 
the  price  of  coal  is  fixed,  and  the  conditions  of  pro- 

1  According  to  the  United  States  Geological  Survey  the  total  pro- 
duction in  1907  was  76,432,421  tons,  and  the  value  at  the  mines 
was  $163,584,056. 

2  At  a  hearing  held  before  the  New  York  State  Railroad  Commis- 
sion in  1900,  the  president  of  the  New  York,  Ontario  and  Western 
Railroad  made  the  startling  admission  that  "  without  some  restric- 
tion (such  as  railway  control)  stove  coal  would  be  a  drug  in  the 
market  at  two  dollars  a  ton. " 


THE  STRANGLE  HOLD  OF  MONOPOLY    47 

duction  are  determined,  by  a  little  group  of  men,  who, 
within  a  few  years'  time,  have  acquired  possession  of 
the  mass  of  securities  which  overlay  these  properties. 
Through  the  merger  of  the  railroads  and  the  coal 
fields,  stock  and  bonds  in  excess  of  $400,000,000 
have  been  issued,  a  sum  equal  to  nearly  one-half  of 
the  present  Federal  debt.  By  means  of  the  monop- 
oly which  has  been  acquired,  a  tribute  is  exacted 
from  the  American  people  of  from  $100,000,000  to 
$200,000,000  a  year.  Under  the  control  of  this 
syndicate  167,000  men  are  employed,  and  nearly 
1,000,000  souls  supported.  The  wages  of  the  men, 
their  hours  of  employment,  even  the  prices  they  shall 
pay  for  the  barest  necessities  of  life,  are  determined 
by  a  Wall  Street  syndicate,  indifferent,  and  largely 
ignorant,  of  the  industry  which  it  controls,  except  as 
its  operations  affect  the  stock  market. 

Here  is  a  deposit  of  nature  which  all  of  the  wis- 
dom of  science  and  all  of  the  ingenuity  of  man  could 
not  reproduce.  Upon  its  use  the  transportation,  in- 
dustry, heat,  even  life  itself,  of  a  large  portion  of 
America  depend.  Yet  it  may  not  be  used,  may  not 
be  brought  to  the  surface,  and  may  not  be  conveyed 
to  market,  except  upon  the  permission  of  those  who 
have  acquired  the  title-deeds  of  ownership  against 
80,000,000  of  their  fellow  creatures,  the  joint  heirs 
to  this  bounty  of  Providence. 

In  1859  petroleum  was  discovered.  This  dis- 
covery has  given  birth  to  a  dozen  fortunes  which 


48  PRIVILEGE  AND  DEMOCRACY 

run  into  the  hundreds  of  milHons.  In  fifty  years' 
time  open-hearted  nature  has  poured  forth  wealth 
to  the  value  of  billions.  Upon  this  prodigal  en- 
dowment an  industrial  fabric  has  been  reared  whose 
tributaries,  like  those  of  a  mighty  empire,  include 
transportation  systems  by  land,  and  navies  by  sea, 
as  well  as  mines  of  gold,  silver,  copper,  and  coal, 
richer  by  far  than  those  of  the  Incas;  while  banking, 
insurance,  and  mjTiads  of  other  industries,  whose 
ramifications  no  one  completely  knows,  carry  its 
influence  to  every  corner  of  the  earth, ^  Its  em- 
ployees exceed  in  number  the  army  of  Napoleon  at 
the  battle  of  Waterloo,  and  its  financial  dealings 
surpass  in  amount  the  budget  of  the  Federal  Gov- 
ernment. No  hamlet  is  so  obscurely  hidden  and  no 
nation  is  so  powerful  that  it  does  not  pay  tribute  to 
the  system  which  has  been  erected  by  the  master 
hands  who  have  woven  the  influence  of  "Standard 

•  At  the  investigation  of  the  Standard  Oil  Company  in  New  York 
in  November,  1908,  one  of  the  officials  of  the  Standard  Oil  Company, 
at  the  request  of  the  counsel  for  the  Federal  Government,  produced 
a  list  of  the  oil,  gas,  and  pipe-line  companies  owned  or  controlled  by 
the  Standard  Oil  Company.  This  list  included  117  companies  with 
a  combined  capitalization  of  $328,301,495.  This  included  the 
Standard  Oil  Company  of  New  Jersey  at  its  par  value.  Were  it 
included  at  its  market  value  and  the  other  corporations  at  their  par 
value  the  combined  capital  value  of  these  companies  alone  would 
exceed  three-quarters  of  a  billion  dollars. 

No  report  was  made  of  the  mining,  railway,  franchise,  land, 
banking,  transmission,  and  manufacturing  corporations  owned  or 
controlled  by  the  Standard  Oil  Company  or  its  chief  stockholders. 
But  from  what  we  know  of  the  influences  and  control  of  the  men 
who  are  identified  with  that  corporation,  the  stock  holdings  which 
they  control  must  equal  many  times  the  above  sum. 


THE  STRANGLE  HOLD  OF  MONOPOLY    49 

Oil "  into  the  political,  industrial,  financial,  and  even 
the  educational  life  of  America,  until  no  activity 
and  no  industry  is  free  from  it.  Petroleum  pours 
forth  from  the  earth  almost  as  freely  as  do  the 
springs  from  the  mountain-sides/  It  is  one  of  the 
great  civilizing  agencies  of  the  age.  Through  its  use 
much  of  the  culture  and  enlightenment  of  the  last 
century  has  been  made  possible.  It  has  relieved  the 
drudgery  of  the  farm  and  the  cottage;  it  has  made 
possible  the  universal  education  of  the  people.  Yet 
this  fountain  of  nature  has  passed  into  the  hands 
of  men  who  have  not  only  monopolized  the  out- 
put but  have  controlled  the  means  of  communica- 
tion, so  that  every  other  producer  has  been  subject 
to  its  will  in  the  bringing  of  oil  into  use. 

But  a  few  years  after  the  discovery  of  petroleum, 
natural  gas  burst  from  the  earth.  Here  was  light 
and  fuel,  distilled  in  nature's  laboratories,  adequate 
for  the  needs  of  the  great  central  West.  It  was 
almost  as  free  as  the  waters  of  the  Great  Lakes.  Here 
was  fuel  for  the  upbuilding  of  the  industries  of  a 
third  of  the  population  of  America.  Here  was  light, 
heat,  and  power  adequate  for  generations  as  yet  un- 
born. Yet  in  a  few  years'  time  these  reservoirs  of 
nature  have  been  overlaid  by  title-deeds,  held  most 
largely  by  those  who  had  already  made  petroleum 
their  servant,  and  whose  incomes  are  being  aug- 

'  In  1907  the  value  of  the  petroleum  produced  amounted  to 
$120,106,000. 


50  PRIVILEGE  AND  DEMOCRACY 

merited  by  unknown  millions  each  year  from  this 
mysterious  source. 

State  after  state  is  also  underlaid  with  broad  acres 
of  bituminous  coal.  These  deposits  run  from  the 
Alleghanies  to  the  Rockies.  From  the  original  own- 
ers they  passed  to  independent  operators;  from 
the  independent  operators  they  have  largely  passed 
to  the  railroads.  In  Pennsylvania,  West  Virginia, 
Ohio,  Indiana,  Illinois,  Missouri,  and  Colorado,  the 
alliance  between  the  coal  mine  and  the  railway  has 
long  been  complete.  There  is  scarce  a  great  railroad 
system  that  does  not  own  or  control  great  areas  of 
bituminous  coal.  In  many  instances  their  holdings 
have  been  increased,  independent  operators  have 
been  crushed,  and  competition  has  been  killed  by 
the  methods  repeatedly  laid  bare  by  the  investiga- 
tions of  the  Interstate  Commerce  Commission.  The 
long-familiar  practices  of  the  oil  industry,  of  dis- 
criminating freight  rates,  alleged  car  shortages, 
and  intimacy  of  ownership,  have  placed  operators, 
as  well  as  whole  sections  of  the  country,  under 
the  arbitrary  control  of  the  public  carriers  of  the 
nation.  This  community  of  ownership  between 
the  railroads  and  the  coal  companies  is  now  pro- 
hibited by  Federal  statute.  The  letter  of  the 
law  may  be  observed,  but  community  of  interest, 
through  the  common  ownership  of  the  capital 
stock,  cannot  be  reached  by  statute  or  by  crim- 
inal prosecution. 


THE  STRANGLE  HOLD  OF  MONOPOLY    51 

In  the  bituminous,  as  well  as  in  the  anthracite 
coal  industry  monopoly  is  the  result  of  legal  rather 
than  of  illegal  means.  This  is  true  of  every  mo- 
nopoly that  is  identified  with  the  land.  It  is  not  the 
law-breaker,  it  is  the  law-maker,  who  is  responsible 
for  this  sort  of  monopoly.  For  the  right  of  private 
ownership  carries  with  it  the  right  of  unlimited 
ownership.  And  unlimited  ownership  carries  with  it 
the  right  to  do  as  one  wills  with  one's  own,  whether 
it  be  a  jack-knife,  a  coal  mine,  or  a  great  railroad 
system.^ 

It  is  little  more  than  a  score  of  years  since  the 
low-lying  hills  of  northern  Michigan,  Wisconsin,  and 
Minnesota  disclosed  their  untouched  treasures  of 
Bessemer  ore  to  man.  In  1884  the  Vermillion  and 
Menominee  iron  mines  were  first  opened  up  to  use. 
Eight  years  later  the  Mesabi  range,  then,  as  now,  a 
trackless  timber  waste,  was  uncovered,  and  close 
below  the  surface  wealth  more  fabulous  than  any 
Comstock  or  Kimberley  lode  was  laid  bare.  Here 
were  the  foundations  of  the  civilization  of  to- 
morrow. For  steel  was  soon  to  be  king.  And  here 
is  Bessemer  ore,  whose  value  in  the  ground  has  been 
estimated  by  officials  of  the  Steel  Trust  at  from  one 
to  two  thousand  million  dollars.^  Here  is  the  struct- 
ural basis  of  the  railway,  the  steamship,  the  factory, 

•The  value  of  the  output  of  bituminous  coal  in  1907  was  $451,- 
214,000.     The  industry  employed  513,258  men. 
^Report  of  Industrial  Commission,  Vol.  XIII,  (Washington)  p.  472. 


52  PRIVILEGE  AND  DEMOCRACY 

the  office  building,  and  the  home.  Here  are  the 
means  for  the  conveyance  of  water,  of  gas,  of  heat, 
and  of  power.  To-day  eighty-eight  per  cent,  of  the 
iron  ore  of  the  United  States  comes  from  these  barren 
hillsides.  The  ore  is  mined  by  open  surface  cuts,  as 
cheaply  and  as  easily  as  if  it  were  the  sand  by  the  sea. 
It  costs  but  a  few  cents  a  ton  to  mine  the  Mesabi  ore. 
It  involves  no  more  labor  cost  than  the  removal  of  a 
ton  of  dirt.  Yet  almost  all  of  these  deposits  have 
passed  under  the  control  of  the  United  States  Steel 
Corporation.  It  has  more  recently  acquired  the  vast 
deposits  in  the  South  through  the  purchase  of  the 
Tennessee  Coal  and  Iron  Company.  It  indirectly 
controls  the  Colorado  ore  field  as,  well.  It  is  this 
monopoly  of  the  raw  materials  of  production  that  en- 
abled the  promoters  of  the  Steel  Trust  to  capitalize 
it  at  a  billion  and  a  half  dollars.  It  is  through  this 
means  that  it  dominates  the  markets  of  America  if 
not  of  the  world. ^ 

The  Steel  Trust  is  invincible,  not  because  of  the 
skill,  talent,  or  industry  of  its  promoters;  not  be- 
cause of  the  plants,  mills,  or  furnaces  which  it  has 
erected.  The  power  of  the  Steel  Trust  lies  in  its 
control  of  the  iron-ore  mines  of  the  Lake  Superior 
region  and  of  Alabama,  Tennessee,  and  Colorado, 
together  with  the  coking  coal,  gas,  and  limestone 
quarries  of  Pennsylvania.    These,  with  the  prohibi- 

•  The  value  of  the  iron-ore  production  in  the  United  States  in  1907 
was  $131,996,000. 


THE  STRANGLE  HOLD  OF  MONOPOLY    53 

tive  tariff  which  the  iron  and  steel  interests  have  ob- 
tained, make  its  control  complete.  For  the  Steel 
Trust  owns  from  60,000  to  80,000  acres  of  Connells- 
ville  coal.  It  produces  something  over  one-half  the 
coke  of  the  United  States.  This  is  the  best  coking 
coal  in  the  world.  ^^  There  is  no  more  Connellsville 
coal,"  said  Mr.  Charles  Schwab,  the  former  presi- 
dent of  the  steel  corporation.  ''You  could  not  buy 
it  for  $60,000  an  acre.  .  .  .  Every  acre  of  it  is  very 
highly  prized,  and  that  is  owned  by  all  these  con- 
stituent companies  in  toto. "  ^  The  company  also 
owns  98,000  acres  of  gas  and  oil  lands. 

Only  less  marvellous  than  the  story  of  anthracite 
coal,  of  the  gas  and  the  iron-ore  deposits,  is  the  story 
of  copper.  In  northern  Michigan,  in  Arizona,  and 
in  Utah  are  copper  deposits  whose  only  rival  is  the 
Rio  Tinto  in  Spain,  owned  by  the  Rothschilds.  Of 
these,  the  Calumet  and  Hecla  is  easily  chief.  The  par 
value  of  its  stock  is  $25.00  a  share.  Of  this  but 
$12.00  a  share  has  ever  been  paid  in.  The  shares 
of  this  company  have  recently  sold  as  high  as  $1,000, 
and  its  quarterly  dividends  exceed  the  original  pay- 
ments for  the  stock.  Copper  has  made  many  multi- 
millionaires, just  as  it  has  wrecked  many  bank 
clerks.  The  annual  value  of  the  copper  output  of 
America  exceeds  $173,799,000,  and  the  control  of  the 
markets  of  America  now  rests  in  the  hands  of  the 
same  men  who  have  laid  their  hands  upon  the  iron, 

'Report  of  the  Industrial  Commission,  Vol.  XIII,  p.  464. 


54  PRIVILEGE  AND  DEMOCRACY 

the  oil,  the  gas,  the  coal  resources,  and  the  railways 
of  the  country.  All  society  is  paying  tribute  to  these 
men.  For  copper,  next  to  coal,  iron,  and  steel,  is  the 
most  universal  necessity  of  modern  industrial  life. 

All  over  the  land  the  needs  of  a  great  civilization 
were  anticipated  by  Providence.  Here  were  re- 
sources adequate  for  uncounted  millions  of  people. 
If  it  is  possible  to  infer  any  divine  purpose  in  the 
ordering  of  the  universe,  surely  these  deposits  of 
wealth  were  designed  for  the  use  of  all  the  people, 
rather  than  the  exclusive  ownership  by  a  few.  Yet 
no  state  in  the  Union  has  so  much  as  reserved  a  roy- 
alty for  their  use,  and  no  community  has  placed  them 
upon  the  tax  duplicate  at  much  more  than  their 
farming  value.  Yet  a  moderate  royalty  upon  the 
mineral  output  of  the  country  would  have  been  suf- 
ficient to  pay  all  of  the  present  expenditures  of  the 
Federal  Government.^  Nature,  generous  to  a  de- 
gree, has  been  thwarted  by  laws  of  our  own  making. 
Society,  with  even  less  wisdom  than  the  wild  animals 
of  the  forest,  has  erected  barriers  between  itself  and 
its  inheritance.     Within  less  than  a  generation,  these 

'  The  United  States  Geological  Survey  for  1908  gives  the  value  of 
the  mineral  output  of  the  country  for  the  year  1907  as  $2,069,289,- 
196.  Pig  iron  is  valued  at  $529,958,000;  copper  at  $173,799,000; 
bituminous  coal  at  $451,214,000;  anthracite  coal  at  $163,584,000; 
petroleum  at  $120,106,000;  and  natural  gas  at  $52,866,835.  Had 
the  government  retained  a  royalty  on  the  mineral  products  of  the 
country  of  25  per  cent,  the  revenues  of  the  nation  would  have 
amounted  to  $517,322,299,  or  almost  the  sum  which  is  now  col- 
lected by  the  government  from  the  customs  and  the  internal  revenue 
system. 


THE  STRANGLE  HOLD  OF  MONOPOLY    55 

gifts,  which  but  a  few  years  ago  were  valued  as  agri- 
cultural land,  have  been  massed  under  the  control 
of  Wall  Street.  From  year  to  year  the  control  is 
narrowing,  until  in  a  few  years'  time  practically  all 
of  the  mineral  resources  of  the  country,  whose  present 
annual  production  exceeds  two  billion  dollars,  will  be 
under  the  dominion  of  a  very  few  men.  That  such  a 
power  should  be  enjoyed  by  any  irresponsible  set  of 
individuals  seems  as  contrary  to  any  proper  ordering 
of  society  as  that  the  air  should  be  enclosed,  and  its 
enjoyment  be  made  the  subject  of  an  arbitrary  toll. 
Closely  allied  with  the  resources  of  the  nation  are 
the  great  transportation  systems.  They  are  the  ar- 
teries of  our  life.  During  the  last  few  years  system 
has  been  added  to  system  until  nearly  200,000  miles 
of  railway  have  been  merged  into  a  half-dozen  groups, 
with  a  combined  capitalization  of  over  nine  billion 
dollars.*  Within  these  syndicates  three-fourths  of  the 
mileage  of  America  is  held,  while  each  group,  in  turn, 
is  bound  to  the  other  by  a  community  of  interest,  by 
fear,  or  by  agreement,  so  that  for  all  practical  pur- 
poses the  transportation  agencies  of  the  nation  act 
as  a  unit.  Their  ultimate  consolidation  into  a  single 
monster  corporation  is  not  an  inconceivable  thing  to 
forecast,  or  an  unreasonable  thing  to  expect.^ 

1  See  Moody,  Truth  about  the  Trusts. 

^On  the  death  of  Mr.  Harriman  in  1909  it  was  authoritatively 
stated  that  he  "absolutely  controlled"  21,939  miles  of  railway,  and 
"dominated"  65,176  miles,  or  one-fourth  of  the  total  mileage  of 
America. 


56  PRIVILEGE  AND  DEMOCRACY 

Already  the  industrial  life  of  the  nation  rests  in 
the  hands  of  these  Titans  of  finance,  who,  in  recent 
years,  have  made  use  of  the  banks  and  insurance 
companies  to  secure  control  of  the  resources  and 
transportation  agencies  of  the  country.  For  who- 
ever controls  the  highways  controls  the  vital  organs 
of  society,  and  when  to  this  is  added  the  raw  ma- 
terials of  production,  the  dominion  is  complete. 
The  tribute  which  may  be  taken  is  like  the  spoils  of  a 
Roman  conqueror.  From  the  decision  of  the  owner 
there  is  no  appeal,  for  of  competition  there  is  none. 
By  the  stroke  of  a  pen  hundreds  of  millions  of  dollars 
may  be  transferred  from  the  pockets  of  the  people  to 
the  pockets  of  the  owners  of  these  great  interests. 
The  advance  in  the  published  freight  rates  upon  all 
the  railroads  in  the  country  in  the  year  1900  was  prob- 
ably not  less  than  twenty-five  per  cent/  During  the 
four  years  from  1899  to  1903  $155,000,000  was  added 
to  the  earnings  of  the  railways  through  the  increase  in 
freight  rates  alone. ^  An  insignificant  increase  in  the 
price  of  oil,  of  coal,  or  of  copper  produces  a  similar 
result.  It  is  by  such  means  as  these  that  the  wealth  of 
the  producers  of  America  is  surely  and  stealthily  being 
appropriated.  It  is  by  this  process  that  the  pennies 
of  the  millions  are  becoming  the  millions  of  the  few. 

It  is  impossible  to  ascertain  the  extent  to  which  the 
wealth  of  America  has  been  massed  within  the  past 

» Report  of  Industrial  Commission,  Vol.  XIX,  p.  285. 

'  Senate  Document  No.  257,  5Sth  Congress,  2d  session,  p,  8. 


THE  STRANGLE  HOLD  OF  MONOPOLY    57 

ten  years,  but  an  examination  of  Moody's  Truth 
about  the  Trusts  discloses  the  extent  to  which  the 
Standard  Oil,  Rockefeller,  Morgan,  Ryan,  Elkins, 
Widener,  and  Havemeyer  interests  have  secured 
control  of  the  railways,  the  mining,  the  franchise, 
and  the  protected  industries,  whose  combined  cap- 
italization amounts  to  approximately  twenty-five 
thousand  million  dollars. 

Incredible  as  is  this  exhibit  of  wealth,  it  is  but  the 
beginning  of  the  enumeration.  It  does  not  include 
the  great  fortunes,  like  the  $450,000,000  Astor  es- 
tate, which  have  come  from  city  land  values;  it 
does  not  include  the  gold  and  the  silver  mines,  the 
franchise  corporations,  the  insurance,  banking,  and 
other  fortunes;  it  does  not  include  the  multitude 
of  industrial  combinations,  which,  through  the  ma- 
nipulation of  the  stock  market,  have  fallen  under 
the  same  control. 

Such  a  mass  of  wealth  staggers  the  imagination. 
The  thought  of  millions  conveys  no  impression,  even 
to  those  accustomed  to  think  in  big  figures,  while 
thousands  of  millions  are  like  the  astronomical 
distances  which  separate  the  stellar  bodies.  Yet 
within  the  control  of  a  score  of  men  is  a  calculable 
sum  in  excess  of  the  total  wealth  of  the  United 
States  at  the  close  of  the  Civil  War.  It  amounts  to 
more  than  one-fifth  of  all  the  wealth  of  the  country, 
as  ascertained  by  the  Census  in  1904. 


CHAPTER  V 
THE  TOOLS  OF  PRIVILEGE 

How  has  this  colossal  mass  of  wealth  been  ac- 
quired? By  what  means  have  a  few  men,  uncon- 
nected with  the  fields  of  industry,  and  in  many  in- 
stances wholly  ignorant  of  its  processes,  been  able  to 
acquire  possession  of  the  railways,  the  franchise 
corporations,  the  protected  industries,  the  mineral 
resources,  and  a  great  part  of  the  land  of  America, 
whose  increasing  earnings,  like  a  mountain,  rest  on 
the  backs  of  humanity?  For  the  properties  so 
acquired  are  the  most  profitable  in  the  country.  By 
an  unfailing  instinct  the  natural  monopolies  have 
been  appropriated  first.  How  has  this  been  achieved  ? 
How  has  it  been  possible  for  a  handful  of  men  to 
acquire  possession  of  wealth  in  excess  of  that  which 
the  16,000,000  workers  of  America,  at  the  current 
rate  of  wages,  could  produce  in  two  long  years?  By 
what  means  has  the  United  States  been  changed 
from  a  country  in  which  opportunity  seemed  open  to 
all  for  many  generations  to  come,  to  the  conditions 
which  now  confront  us  ? 

A  short  generation  ago  all  this  would  have  seemed 
impossible.  Yet  nothing  was  simpler.  We  hung 
our  treasures  in  the  streets,  and  now  wonder  why 

58 


THE  TOOLS  OF  PRIVILEGE  59 

they  are  gone.  Not  content  with  exposing  them 
to  the  first  comer,  we  created  the  means  for  car- 
rying them  away.  We  asked  men  to  appropriate 
our  mineral  resources,  and  then  passed  tariff  laws 
to  make  monopoly  inevitable  and  invincible.  We 
turned  over  the  highways  to  private  hands,  and  now 
wonder  why  they  are  managed  as  a  private  bus- 
iness. We  encouraged  land  monopoly,  and  are 
now  amazed  at  the  growth  of  a  peasant  tenantry. 
Having  done  these  things  we  then  created  the  most 
perfectly  adjusted  financial  machinery  for  complet- 
ing the  process. 

In  1896  ''the  money  monopoly"  seemed  a  heated 
Populistic  phrase.  Within  the  past  few  years  the 
methods  of  banking  have  been  laid  bare.  Scattered 
all  over  America  are  savings  and  trust  companies 
whose  deposits  range  from  a  few  thousands  to  tens  of 
millions  of  dollars.  In  these  banks  are  the  savings 
of  the  rich  and  of  the  poor.  In  the  larger  interior 
cities,  like  Chicago,  St.  Louis,  Cleveland,  and  Pitts- 
burg, are  banks  which  are  used  by  the  smaller  towns 
for  the  purpose  of  clearance.  Here  the  inland  banks 
maintain  reserves  for  the  easier  transaction  of  their 
business.  And  just  as  the  smaller  banks  make  use 
of  the  inland  cities  as  depositaries,  so  the  latter  make 
use  of  the  banks  in  New  York  for  the  same  purpose. 
By  this  means  Wall  Street  has  become  the  financial 
reservoir  of  the  nation.  Here  the  money  and  the 
available  credit  of  America  is  gathered,  just  as  the 


60  PRIVILEGE  AND  DEMOCRACY 

local  bank  gathers  the  pennies,  dimes,  and  dollars 
of  the  people. 

For  years  Wall  Street  has  been  the  centre  of  for- 
eign exchange.  It  is  the  clearing-house  of  America. 
These  functions  it  still  performs.  They  are  of  great 
value  to  the  complex  industrial  relations  of  the  mod- 
ern world.  Here,  too,  is  the  government  sub-treas- 
ury. Here  are  banking  institutions  whose  operations 
rival  in  magnitude  those  of  the  Bank  of  England. 
Here  are  the  trust  companies  whose  powers  are 
more  ample  than  those  of  any  bank  in  the  world. 
Through  these  agencies  the  business  of  America 
passes.  Through  the  government  sub-treasury,  the 
trust  companies,  the  banks,  and  the  insurance  com- 
panies, credit  transactions  circulate  to  the  uttermost 
extremities  of  the  land.  Wall  Street  is  the  centre  of 
the  circulatory  system  of  the  nation.^ 

Closely  identified  with  the  banks  are  the  great  in- 
surance companies,  whose  agents  in  every  part  of  the 
country  gather  up  the  savings  of  the  people,  precau- 
tionary investments  for  old  age  or  some  calamity  of 
nature.  These  premiums  also  flow  to  Wall  Street. 
These  premiums  together  with  the  reserves  likewise 
run  into  the  hundreds  of  millions  of  dollars. 

All  of  these  agencies  run  and  ramify  into  each 
other.  They  have  the  same  stockholders,  the  same 
directors,  the  same  officers,  and  the  same  interests. 

•  The  clearances  of  New  York  during  the  year  1909  amounted  to 
one  hundred  billion  dollars. 


THE  TOOLS  OF  PRIVILEGE  61 

The  trust  companies  are  organized  and  controlled 
by  the  directors  of  the  insurance  companies.  The 
same  men  own  the  national  banks.  A  few  score 
of  men  practically  control  the  available  money  of 
America.  They  not  only  have  the  use  of  the  local 
deposits  of  New  York,  but  of  the  balances  deposited 
with  them  by  the  West.  They  can  increase  these 
deposits  at  will  by  putting  up  the  rates  of  interest  on 
call  money  to  any  point  they  desire.  This  lures  still 
more  deposits  from  the  inland  banks.  In  addition 
the  group  of  men  who  have  acquired  control  of 
the  great  financial  institutions  in  New  York,  control 
or  have  an  interest  in  banks  and  trust  companies 
from  the  Atlantic  to  the  Pacific.  This  is  true  even 
of  the  banks  of  the  smaller  inland  towns.  Thus 
the  money,  and  what  is  more  important  the  credit,  of 
America  has  been  monopolized.  Whoever  owns  the 
means  of  credit  controls  the  industrial  life  of  the 
nation.^  All  industry  is  subject  to  its  will.  Upon 
the  favor  of  these  financial  interests  great  railroad 
systems  are  dependent.  The  richest  corporation  in 
the  world  can  no  more  ignore  this  combination  than 

»This  was  demonstrated  by  the  panic  of  1907.  It  was  a  money 
and  not  an  industrial  panic.  It  was  produced  by  Wall  Street  specu- 
lation. Values  had  been  carried  upward  and  upward  by  the  use  of 
banking  loans.  They  collapsed  by  their  own  weight,  and  caused 
such  a  dislocation  of  credits  that  the  whole  industrial  world  shrank 
in  consequence.  The  control  of  the  credit  of  the  nation  by  Wall 
Street  makes  it  practically  impossible  to  carry  through  any  railway, 
mining,  franchise,  or  other  big  project  without  the  consent  of  those 
who  control  the  situation. 


62  PRIVILEGE  AND  DEMOCRACY 

can  the  smallest  industry  or  the  Western  farmer.  It 
can  depreciate  the  price  of  government  bonds  oi 
embarrass  a  transcontinental  railway  system.  This 
monetary  syndicate  can  win  favor  by  its  favors,  or 
wreak  vengeance  on  those  who  oppose  it.  The  sav- 
ings of  the  people,  deposited  with  their  local  bank- 
ers for  safe  keeping,  have  thus  become  the  basis  of 
financial  transactions  the  most  stupendous  the  world 
has  ever  known.  Ttiey  exceed  in  size  the  financing 
of  a  great  modern  war.  Penny  by  penny,  and  dollar 
by  dollar,  the  savings  of  80,000,000  people  have  been 
lodged  in  the  hands  of  a  few  men,  related  by  social 
and  business  ties,  perfectly  understanding  one  an- 
other, and  bent  upon  the  same  common  purpose. 

It  is  for  the  use  of  these  savings  that  the  Titans  of 
finance  go  to  war.  It  was  to  control  the  premiums 
and  reserves  of  the  insurance  companies  that  men 
paid  millions  for  these  properties.  For  the  deposits 
are  controlled  by  the  directors  and  trustees.  They 
can  loan  or  invest  them  as  they  wish.  The  prices  of 
securities  are  put  up  or  down  as  the  will  of  the  syn- 
dicate dictates.  Through  this  control  of  the  ready 
money  of  America  the  stock  market  is  manipulated. 

The  community  of  interest  which  has  hereto- 
fore existed  among  the  larger  financial  interests  of 
New  York  has  recently  been  converted  into  actual 
ownership  by  two  single  groups.  These  are  the 
Morgan  and  the  Standard  Oil.  The  ''money  monop- 
oly" has  become  a  reality.    Late  in  1909  Wall  Street 


THE  TOOLS  OF  PRIVILEGE  63 

announced  the  acquisition  by  these  two  groups  of 
two  of  the  largest  insurance  companies,  as  well  as  of 
a  number  of  the  largest  banks  in  New  York  and  the 
West.  Six  persons  were  named,  under  whose  con- 
trol financial  institutions  had  passed,  with  capital, 
surplus,  and  reserves  amounting  to  over  a  billion 
and  a  half  of  dollars.  Nobody  knows  the  institu- 
tions controlled  outside  of  the  metropolis,  but  they 
include  not  only  those  of  the  larger  but  of  the  smaller 
inland  cities  as  well.  It  is  not  too  much  to  say  that 
the  banking  resources  and  credit  of  the  country  are 
largely,  if  not  almost  wholly,  within  the  control 
of  the  Standard  Oil  and  Morgan  interests. 

This  is  by  far  the  most  portentous  fact  that  could 
confront  any  people.  The  life  of  the  modern  world 
is  a  financial  life.  It  is  carried  on  by  banking  and 
credit  transactions.  Those  transactions  have  fallen 
under  the  dominion  of  a  group  of  men,  who  could  be 
enumerated  on  the  fingers  of  one  hand.  Through 
the  direct  and  indirect  control  of  the  banks  and 
trust  companies  of  America,  all  business,  all  com- 
merce, all  transportation,  all  of  the  necessities  of 
life,  have  become  subject  to  their  dominion.  The 
daily,  weekly,  and  monthly  press  must  seek  their 
loans  from  this  syndicate.  Competing  industry 
must  go  to  it  for  the  right  to  live.  The  politics  of 
city,  state,  and  nation  are  already  largely  fashioned 
by  its  will.  Some  conception  of  the  extent  of  its 
ramifications  in  the  field  of  industry  may  be  seen 


64  PRIVILEGE  AND  DEMOCRACY 

from  the  fact  that  prior  to  the  mergers  above  re- 
ferred to  'Hhe  directors  of  the  National  City  Bank, 
the  head  of  the  Standard  Oil  group,  and  of  the  Na- 
tional Bank  of  Commerce,  the  head  of  the  Morgan 
group,  hold  over  a  thousand  directorships  in  trans- 
portation, industrial,  and  other  commercial  corpora- 
tions."* By  means  of  the  financial  resources  in 
their  hands  the  railways  and  industries  of  the  country 
were  brought  under  monopoly  control  in  the  closing 
years  of  the  last  century.  Dr.  Wm.  A.  Scott,  pro- 
fessor of  political  economy  at  the  University  of 
Wisconsin,  describes  the  extent  to  which  this  has 
already  gone.    He  says: 

"The  Morgan,  Vanderbilt,  Pennsylvania,  Gould- 
Rockefeller,  Harriman  -  Kuhn  -  Loeb,  and  Moore 
groups,  and  their  more  recent  successors,  represent 
the  achievements  of  high  finance  in  this  field,  and 
great  achievements  they  have  been,  involving  the 
bringing  together  under  the  management  of  less  than 
seven  groups  of  financiers  nearly  2,000  railroad  cor- 
porations, representing  more  than  200,000  miles 
of  track  and  a  capitalization  of  about  thirteen  billions 
of  dollars.     (Moody's  The  Truth  about  the  Trusts.) 

''In  the  industrial  field  the  achievements  of  high 
finance  have  been  scarcely  less  remarkable.  By 
January  1, 1904,  seven  great  industrial  trusts  had  been 
developed,  controlling  1,528  plants  with  a  capitaliza- 
tion of  more  than  two  and  a  half  billion  dollars,  and 
298  lesser  industrial  trusts,  controlling  more  than 
3,000  plants,  capitalized  at  over  four  billion  dollars. 
By  January  1,  1908,  the  groat  trusts  controlled  over 

'  A  Decade  oj  High  Finance,  p.  7,  by  W.  A.  Scott,  Ph.D. 


THE  TOOLS  OF  PRIVILEGE  65 

1,600  plants  capitalized  at  nearly  three  billions  of 
dollars,  and  the  lesser  ones  over  5,000  plants  cap- 
italized at  over  eight  billions  of  dollars.  To  these 
should  be  added  the  so-called  franchise  trusts,  con- 
trolling about  2,500  plants  capitalized  at  over  seven 
and  a  half  billions  of  dollars."  * 

Control  of  the  banking  resources  and  through 
them  of  the  stock  market  has  been  the  means  by 
which  the  control  of  industries  has  been  brought 
about.  Through  this  control  the  cost  of  living  and 
the  material  well-being  of  the  people  are  influenced. 

^'The  Standard  Oil  and  Morgan  federations  have 
well-nigh  attained  such  control.  Through  the  di- 
rectorate of  groups  of  railroad  and  industrial  cor- 
porations they  are  able  almost  at  will  to  increase  or 
decrease  the  earning  power  now  of  this  enterprise 
now  of  that.  .  .  .  Through  reorganization  schemes 
they  can  water  the  stock  of  a  concern  until  even 
huge  earnings  yield  only  insignificant  dividends. 
Being  themselves  possessed  of  great  wealth  and 
holding  large  blocks  of  securities,  they  can  place  so 
much  pressure  on  either  the  supply  or  demand  side 
of  the  market  as  to  force  prices  in  the  direction  de- 
sired. Through  their  control  of  great  banks  and 
trust  companies  they  may  increase  or  diminish  the 
amount  of  funds  available  for  investment  and  specu- 
lation." 2 

Upon  the  savings  of  the  people,  gathered  together 
like  the  rivulets  which  gradually  grow  into  a  mighty 
stream,  has  been  erected  a  financial  feudalism  which 
is  gradually  absorbing  to  itself  the  industrial  wealth 

>  A  Decade  of  High  Finance,  p.  7,  by  W.  A.  Scott,  Ph.D. 
^  Idem,  p.  21. 


66  PRIVILEGE  AND  DEMOCRACY 

of  America.  In  the  transactions  of  the  directors  of 
these  financial  institutions  there  is  no  breach  of  trust. 
No  wrong  thing  has  been  done  in  the  use  of  the  coun- 
try's credit.  But  the  result  has  been  the  complete 
subjection  of  the  American  people  to  a  power, 
whose  ruthlessness  or  generosity  is  only  a  matter  of 
the  wish  of  those  who  control  the  system.  Through 
the  control  of  these  funds,  railroads,  mines,  indus- 
tries, and  franchise  corporations  have  been  taken  over. 
Syndicates  are  formed  among  the  banking  interests. 
They  make  loans  to  themselves  of  other  people's 
money.  Competing  properties  are  purchased.  When 
ownership  is  secured  the  properties  are  consolidated. 
Securities  are  then  watered.  These  in  turn  are  sold 
to  the  people  whose  money  has  been  used  to  effect 
the  monopoly.  No  new  wealth  has  come  into  being 
in  the  process.  Nothing  has  been  added  to  the  prop- 
erties. Only  the  tribute  of  those  who  toil  has  been 
increased. 

Herein  is  the  machinery  by  which  the  wealth  of 
America  has  been  cornered.  It  was  by  such  meth- 
ods as  these  that  the  great  combinations  of  the  last 
few  years  have  been  carried  through.  By  this  proc- 
ess the  anthracite  coal  monopoly  came  into  being. 
Thus  the  Steel  Trust,  with  its  billion  and  a  half  of 
securities,  was  fastened  upon  the  American  people. 
By  these  means  the  beef,  the  sugar,  the  tobacco,  the 
copper,  and  many  other  trusts  were  created.  Ac- 
cording to  the  census  enumeration  of  1900  the  wealth 


THE  TOOLS  OF  PRIVILEGE  67 

of  America  was  $94,300,000,000.  At  the  same  time 
there  were  over  440  industrial  franchise  and  transpor- 
tation monopolies  with  a  total  capital  of  $20,379,162,- 
000,  or  more  than  one-fifth  of  the  total  census  wealth 
of  America.  Most  of  these  combinations  had  come 
into  existence  in  the  preceding  half-dozen  years. 

Only  surviving  exceptions  give  reality  to  the 
banking  business  as  described  in  the  books,  just  as 
surviving  examples  of  independent  coal,  iron-ore, 
sugar,  and  meat  producers  give  reality  to  the  com- 
petitive principles  of  economic  science.  To  such  an 
extent  is  the  credit  of  America  being  used  for  spec- 
ulative purposes,  for  the  upbuilding  of  monopoly 
interests  through  pools,  corners,  and  syndicates,  that 
the  producing  industry  of  the  nation  is  being  starved. 
Money  needed  for  local  industry  is  being  used  in  Wall 
Street  for  purposes  of  speculation.  When  call  loans 
command  in  the  East  from  ten  to  thirty  per  cent., 
banks  will  not  make  time  loans  to  their  local  cus- 
tomers at  six  per  cent.  For  money  flows  to  the  point 
of  highest  return  almost  as  readily  as  water  flows  to 
its  lowest  level. 

This  is  the  lamp  of  Aladdin  by  which  the  resources 
of  America  have  been  cornered.  The  stock  exchange 
is  the  tool  of  these  money  interests.  Prices  are  made 
at  will.  So  is  the  news  which  the  speculative  world 
reads  with  avidity.  Day  by  day  the  presses  are  kept 
busy  printing  certificates  of  servitude  upon  the  peo- 
ple.   They  cost  no  more  than  the  greenbacks  issued 


68  PRIVILEGE  AND  DEMOCRACY 

by  the  government  during  the  Civil  War.  But  they 
are  far  more  costly.  The  Treasury  notes  were  issued 
for  labor.  And  labor  could  and  did  retire  them. 
But  the  inflated  securities  of  monopoly  are  mort- 
gages in  perpetuity  upon  the  labor  of  mankind. 

Even  without  these  tools  monopoly  would  have 
appeared.  It  would  have  been  a  slower  process. 
The  laws  of  the  land  make  monopoly  inevitable. 
For  monopoly  is  not  due  to  illegal  combinations  in 
restraint  of  trade.  Nor  is  it  due  to  the  skill,  talent, 
or  great  ability  of  the  master-minds  of  industry. 
Monopoly  is  created  by  law.  It  is  born  of  law-made 
privilege.  It  is  not  the  law-breaker  who  is  at  fault, 
it  is  the  law-maker.  The  menacing  monopolies  which 
have  come  into  being  are  almost  without  excep- 
tion traceable  to  four  sources.  The  chief  of  these  is 
the  monopoly  of  the  land.  To  this  are  traceable  the 
coal  and  the  iron,  the  oil  and  the  copper,  the  gas  and 
the  timber  monopolies.  It  is  the  monopoly  of  the 
iron  ore  and  coking  coal  that  has  given  the  Steel 
Trust  the  control  of  the  markets  of  America.  The 
same  is  true  of  the  copper  and  the  anthracite  and  bi- 
tuminous coal  monopolies.  It  is  true  of  the  oil  and 
the  gas.  It  is  not  the  wells,  the  refineries,  or  the 
furnaces,  it  is  the  control  of  the  raw  materials  that 
lies  at  the  root  of  these  monster  combinations. 

The  second  great  source  of  monopoly  is  the  private 
ownership  of  the  highways  of  the  nation.  The  rail- 
ways arc  natural  monopolies,  and  the  coal,  oil,  iron, 


THE  TOOLS  OF  PRIVILEGE  69 

and  steel  combinations  are  affiliated  with  them.  In 
many  instances  the  ownership  is  identical.  The  oil 
monopoly  was  born  of  this  intimacy,  while  the  beef, 
the  packing,  the  warehousing,  and  scores  of  minor 
monopolies  have  had  their  inception  and  continue 
their  control  of  the  market  by  the  ownership  of 
private  car  lines,  by  ingenious  preferential  rates,  by 
privileges  of  countless  kinds  which  are  only  possible 
through  the  joint  control  of  the  railways  and  the  in- 
dustry itself. 

The  third  great  privilege  is  that  of  taxation.  The 
tariff  is  the  mother  of  many  trusts.  It  shields  many 
others  which  are  identified  with  the  railways  and  the 
land.  In  this  class  are  the  sugar  and  the  tobacco, 
the  leather  and  the  woollen,  the  harvester  and  the 
cotton,  the  iron,  steel,  copper,  lumber,  paper,  and 
many  other  combinations. 

The  fourth  source  of  monopoly  is  the  direct  action 
of  the  government  itself  in  the  creation  of  exclusive  ; 
grants,  of  which  the  franchises  of  our  cities  are  the  / 
chief.  The  rights  of  way  which  they  occupy  are 
exclusive.  There  is  no  possibility  of  competition. 
The  laws  have  been  drafted  by  the  privileged  classes. 
Once  granted,  franchises  cannot  be  amended  or  re- 
pealed. Upon  these  franchises  billions  of  securities 
have  been  issued,  upon  which  excessive  rates  and 
charges  are  fixed. 

Nine-tenths  of  the  monopolies  of  to-day  are  the 
children  of  our  own  creation.    They  have  arisen 


70  PRIVILEGE  AND  DEMOCRACY 

through  no  violation  of  the  law.  They  have  been 
invited  by  the  law  itself. 

Almost  without  exception  they  are  identified  with 
the  land,  or  are  buttressed  by  some  legislative  act, 
which  gives  them  a  monopoly  of  the  market  or  of  the 
service  which  they  render.  The  law  itself  offers  a 
sheltering  arm  to  monopoly  from  the  competition 
which  lies  at  the  life  of  other  business.  And  the  wa- 
tered securities  which  spread  like  a  mortgage  upon 
the  people  of  America  represent  no  labor  on  the  part 
of  those  who  issued  them.  No  new  wealth  has  come 
into  existence  through  this  addition  of  billions  of  se- 
curities to  these  corporations.  Monopoly  does  not 
make  the  grass  to  grow,  or  the  wheels  of  industry  to 
turn.  Far  from  stimulating  production,  monopoly 
causes  production  to  die.  For  monopoly  means 
scarcity.  It  reduces  the  output  of  field  and  factory, 
and  erects  a  barrier  about  the  nation  by  means  of  a 
tariff  wall  for  the  purpose  of  limiting  the  supply  of 
wealth. 

Yet,  while  no  wealth  has  come  into  being  by  this 
process,  those  who  labor  are  the  poorer  by  reason  of 
it.  It  cannot  be  otherwise.  The  dividends  of  priv- 
ilege can  only  mean  cold,  hunger,  and  want  for  the 
millions,  just  as  they  mean  idle  luxury  for  the  few. 
This  is  the  meaning  of  monopoly;  this  is  part  of  the 
cost  of  the  private  ownership  of  the  highways  and 
the  resources  of  the  earth. 


CHAPTER  VI 
THE  NEW  SERFDOM 

Along  with  the  enclosure  of  the  land  there  has 
gone  an  increase  in  tenancy  as  well  as  in  the  size  of 
farm  holdings.  The  free  home-owner  is  diminishing 
in  comparison  with  the  tenant,  while  the  small  farm 
is  being  overshadowed  by  the  large  estate.  These 
movements  are  already  well  under  way.  They 
characterize  the  East  as  well  as  the  West.  The 
rapidity  of  the  change  is  startling.  We  are  fast  be- 
coming a  nation  of  tenants,  and  from  now  on  the 
movement  will  in  all  probability  continue  at  an 
accelerated  pace. 

Conclusive  proof  of  the  increase  in  tenancy  ap- 
pears from  the  reports  of  the  United  States  Census. 
It  is  evident  in  agricultural  as  it  is  in  urban  homes. 
In  the  year  1880  the  number  of  farms  operated  by 
owners  was  74.5  per  cent,  of  the  total.  This  was  in 
the  midst  of  the  flood  tide  of  Western  migration, 
when  the  country  was  recovering  from  the  de- 
pression of  the  previous  decade.  The  homestead 
law  was  calling  to  the  West  the  dispossessed  of 
all  the  world.  Here  was  land  in  abundance,  which 
the  nation  and  the  states  desired  only  to  see  appro- 
priated. 

71 


72  PRIVILEGE  AND  DEMOCRACY 

By  1890  the  number  of  farms  operated  by  owners 
had  diminished  to  71.6  per  cent,  of  the  total.  Dur- 
ing the  decade  from  1890  to  1900,  a  decade  coinci- 
dent with  another  period  of  industrial  depression  and 
recovery,  the  decline  in  farm  ownership  amounted  to 
a  rush.  By  the  close  of  the  century  the  percentage 
of  farm  ownership  had  fallen  to  64.7  per  cent,  of  the 
total. 

In  the  twenty  years  from  1880  to  1900  cash  ten- 
ants increased  from  8  per  cent,  to  13.1  per  cent, 
of  the  total,  while  share  tenants  increased  from 
17.5  per  cent,  to  22.2  per  cent.  The  increase  in 
the  cash  tenants  was  even  more  marked  than  the 
increase  in  the  number  of  tenants  with  an  interest 
in  the  soil.^ 

An  increase  in  tenancy  may  be  expected  in  any 
growing  country.  The  increase  in  population  makes 
it  inevitable.  But  that  tenancy  in  America  should 
have  increased  with  such  rapidity  is  startling.  And 
the  census  enumerators  have  given  the  most  favor- 
able construction  possible  to  the  returns.  They 
have  included  as  '^owners"  all  those  who  were  "part 
owners"  as  well  as  those  who  were  '^ owners  and  ten- 
ants" and  ''managers. "    They  have  helped  the  pros- 

*  The  distribution  of  farm  ownership  during  these  years,  accord- 
ing to  the  census  of  1900  (Vol.  V,  Twelfth  Census),  is  as  follows  : 

Year                                            Owners  Cash  Tenants  Share  Tenants 

1880 74.5  per  cent.  8     percent.  17.5  per  cent. 

1890 71.6  per  cent.  10     percent.  18.4  per  cent. 

1900 64.7  per  cent.  13.1  percent.  22.2  per  cent. 


THE  NEW  SERFDOM  73 

perity  theory  as  much  as  statistical  license  would 
permit.  For  this  reason  the  census  showing  of  farm 
ownership  is  much  more  favorable  than  the  real  con- 
ditions warrant.  For  in  1900  only  54.9  per  cent, 
of  all  the  farms  were  operated  by  full  owners,  while 
45.1  per  cent,  were  in  the  hands  of  tenants,  or  ten- 
ants with  some  sort  of  interest  or  ownership  in  the 
soil. 

Startling  as  is  the  extent  of  tenancy,  the  ratio 
with  which  it  has  increased  during  the  past  twenty 
years  is  far  more  startling.  From  1880  to  1900  the 
number  of  farms  of  all  forms  of  tenure  increased 
from  4,008,907  to  5,739,657,  or  an  increase  in  farms 
under  cultivation  of  1,730,750.  The  farms  operated 
by  owners  increased  729,065,  or  24.4  per  cent.;  the 
farms  operated  by  cash  tenants  increased  from 
322,357  to  752,920,  a  gain  of  430,563,  or  133.6  per 
cent.;  while  the  farms  operated  by  share  tenants 
increased  from  702,244  to  1,273,366,  a  gain  of 
571,122,  or  81.3  per  cent.  The  percentage  of  in- 
crease in  cash  tenancy  was  five  and  one-half  times 
the  percentage  of  increase  of  ownership,  while  the 
percentage  of  increase  in  share  tenancy  was  nearly 
three  and  one-half  times  as  much  as  the  percentage 
of  increase  in  ownership. 

Year  by  year,  and  decade  by  decade,  the  loss  in 
farm  ownership  has  continued.  It  is  not  confined 
to  any  one  section  or  to  any  form  of  agriculture. 
The  relative  number  of  owners  has  everywhere  de- 


74  PRIVILEGE  AND  DEMOCRACY 

creased,  while  the  relative  number  of  tenants  has 
everywhere  increased. 

When  the  acreage  involved  in  various  kinds  of  oc- 
cupancy is  considered,  the  extent  in  the  decline  of 
ownership  is  even  more  discouraging.  By  the  close 
of  the  century  exactly  one-half  of  the  acreage  of 
farming  land  had  passed  under  tenant  or  qualified 
owner  occupancy.  Of  the  841,201,546  acres  of  land 
under  cultivation,  422,354,923  acres  were  in  the 
hands  of  '^owners."  The  other  half  was  operated 
by  'tenants,"  ''part  owners,"  or  ''owners  and  ten- 
ants, "  and  "managers. "  And  even  if  we  include  as 
"owned"  all  farms  except  those  operated  by  cash 
and  share  tenants,  the  area  of  the  lands  cultivated  by 
pure  tenants  amounted  to  195,072,457  acres,  repre- 
senting a  value  of  $4,750,888,795.' 

This  decline  in  the  percentage  of  home-owners  is 
just  beginning.  The  next  generation  will  see  an 
even  more  rapid  change  in  this  direction.  The 
growth  of  population  will,  of  itself,  produce  this  re- 
sult. For  the  area  of  America  cannot  be  increased. 
The  exactions  of  the  railways,  of  the  meat-packers, 
of  the  elevators,  the  warehousemen,  and  stock  yards 
will  promote  the  tendency  still  more.  A  period  of 
hard  times,  involving  an  increase  in  mortgage  in- 
debtedness, will  still  further  stimulate  it,  so  that  from 
this  time  on  a  relative  decrease  of  farm  ownership 
may  be  expected. 

>  Twelfth  Census,  Vol.  V. 


THE  NEW  SERFDOM  75 

This  growth  of  tenancy  has  been  accompanied  with 
a  steady  increase  in  the  size  of  farms.  During  the 
fifty  years  from  1850  to  1900  the  farm  land  under 
cultivation  increased  from  293,560,614  to  841,201,- 
546  acres.  The  census  enumerators  have  claimed 
that  the  statistics  indicated  a  decrease  in  the  size  of 
farms  in  recent  years.  But  comparisons  have  been 
made  with  the  returns  of  the  year  1850  before  the 
West  was  opened  up  to  settlement.  If  we  take  the 
census  of  1880  for  comparison,  it  appears  that  the 
average  size  of  farms  has  increased  from  133.7  acres 
in  1880,  to  146.6  acres  in  1900.  And  while  some- 
thing more  than  one-half  of  the  total  number  of 
farms  are  still  under  100  acres  in  extent,  it  is  the 
total  acreage  held  in  large  and  small  farms  that 
indicates  the  tendency.  Of  the  total  area  under 
cultivation,  200,324,045  acres,  or  one-fourth  of  the 
total,  are  in  farms  of  1,000  acres  and  over.  In 
twenty  years'  time  the  number  of  farms  in  this 
class  has  increased  from  28,578  to  47,276,  while 
the  average  size  of  these  farms  of  over  1,000 
acres  is  now  4,237  acres.  In  other  words,  twenty- 
five  per  cent,  of  the  farm  acreage  of  America  is 
held  by  the  insignificant  fraction  of  .0006  of  the 
people.  There  can  be  but  little  comfort  in  a 
division  of  the  continent  under  which  less  than 
50,000  persons  own  200,000,000  acres,  an  area  far 
greater  than  that  of  either  France  or  Germany, 
and  almost  exactly  equal  to  the  combined  acreage 


76  PRIVILEGE  AND  DEMOCRACY 

of  Germany  and  the  United  Kingdom,  with  their 
population  of  100,000,000  souls/ 

Upon  this  imperial  domain,  a  hierarchy  of  owners 
and  laborers,  of  landlords  and  of  tenants,  has  arisen 
not  unlike  the  feudal  order.  Had  an  intelligent  fore- 
sight guided  the  distribution  of  the  public  land,  from 
ten  to  twenty  million  people  might  have  been  homed 
on  this  area  with  farms  of  fifty  acres  each.  Twice 
that  number  could  have  produced  a  more  comfort- 
able living  than  many  city  workers  now  enjoy. 
Towns  and  cities  would  have  arisen  and  industries 
would  have  been  called  into  existence  employing 
millions  of  other  workers.  There  would  have  been 
social  and  political  freedom,  for  freedom  is  always 
stimulated  by  home  ownership. 

It  has  been  suggested  that  this  increase  in  tenancy 
may  be  a  good  rather  than  a  bad  thing.  Tenancy, 
it  is  claimed,  may  mean  that  the  wage-earner  is  being 
called  back  from  the  city  to  the  country;  that  the 
blacks  of  the  South  are  taking  up  small  patches  of 
ground  formerly  worked  on  the  plantation  system, 
and  that  farmers  who  have  acquired  a  competence 
are  leaving  the  country  for  the  cities,  the  better  to 

•  In  addition  to  these  great  estates  the  Census  of  1900  shows  that 
103,289,564  acres  are  held  in  farms  whose  average  size  is  210.8 
acres;  129,686,228  acres  are  held  in  farms  whose  average  size  is 
343.1  acres,  and  67,878,349  acres  held  in  farms  whose  average  size 
is  661.9  acres.  Taking  the  country  as  a  whole  501,186,000  acres  are 
in  farms  whose  average  size  exceeded  200  acres.  Only  340,000,000 
acres  of  the  841,201,546  acres  under  cultivation  were  in  farms  of  less 
size  than  the  homesteads  allotted  by  the  government. 


THE  NEW  SERFDOM  77 

educate  their  children,  or  to  pass  the  declining  years 
of  their  life  in  comfort.* 

That  the  negro  should  be  his  own  hand  rather  than 
another's;  that  the  farmer  should  go  to  the  city  to 
educate  his  children;  that  the  wage-earner  should 
leave  the  shop  for  the  fuller  opportunity  of  the  coun- 
tryside— that  all  these  changes  may  make  for  eco- 
nomic improvement  and  well-being  of  these  classes 
is  true.  But  that  tenancy  on  the  part  of  the  farm 
hand,  the  wage-earner,  or  the  negro  is  a  good  thing 
for  any  one  but  for  him  who  partakes  of  another 
man's  labor,  it  is  difficult  to  believe.  For  that  is 
what  tenancy  means.  It  always  means  that  some 
one  must  labor  in  order  that  another  may  be  idle. 
And  the  more  industrious  the  tenant,  the  greater 
the  productivity  of  his  labor,  the  greater  the  de- 
mand for  land  by  those  out  of  work,  the  higher  will 

'  This  is  suggested  by  the  Director  of  the  Census.  Commenting  on 
the  increase  in  tenancy  which  the  last  census  indicated,  he  said: 
"A  change  of  the  same  essential  character  took  place  between  1880 
and  1890  in  each  of  the  five  geographic  divisions.  The  relative 
number  of  owners  everywhere  decreased  and  that  of  cash  and  share 
tenants  increased,  the  share  tenants  in  a  less  degree  than  the  cash 
tenants.  The  change  in  this  character  which  took  place  in  the  dec- 
ade 1880  to  1890  attracted  great  attention.  It  was  taken  for 
granted  almost  universally  that  the  number  of  tenants  was  increase 
ing  at  the  expense  of  the  number  of  the  owners,  and  that  the  move- 
ment expressed  by  the  increase  of  tenancy  was  an  ill  omen  for 
the  republic.  That  there  is  another  way  of  viewing  the  changes 
here  recorded,  and  that  in  some  respects  the  popular  conclusion  over- 
looks some  very  important  social  facts,  is  evidenced  by  tlie  point 
brought  out  in  the  discussion  of  the  facts  of  Tables  LXV  and  LXVI 
that  the  farms  operated  by  owners  have  increased  faster  since  1850 
than  the  agricultural  population.     Such  an  increase  can  only  be  pos- 


78  PRIVILEGE  AND  DEMOCRACY 

be  the  rent  which  must  be  paid.  This  is  inevitable. 
It  is  the  testimony  of  all  experience.  Tenancy  al- 
ways means  labor  for  privilege,  economic  subordi- 
nation for  freedom.     It  can  mean  nothing  else. 

Thus  far  we  have  been  discussing  farm  tenancy 
only.  The  growth  of  tenancy  is  even  more  marked 
in  urban  communities  than  in  the  country.  In  the 
larger  cities  the  home-owner  is  rapidly  disappearing. 
Taking  the  country  as  a  whole,  and  including  urban 
as  well  as  agricultural  homes,  only  4,739,914  of  the 
16,006,437  homes,  or  29  per  cent,  of  the  total,  are 
owned  by  their  occupiers  free  from  encumbrance, 
while  considerably  less  than  half  hold  title-deeds  at 
all.^  In  the  Eastern  cities  tenancy  is  all  but  uni- 
versal. In  New  York  city  the  hired  homes  amount 
to  87.9  per  cent,  of  the  total.  In  the  boroughs 
of  Manhattan  and  the  Bronx  the  percentage  of 
tenants  rises  to  94.1  per  cent.    In  the  cities  of  Bos- 

sible  provided  the  increase  in  the  number  of  tenants  has  been  by  the 
elevation  of  former  wage  employees  to  the  position  of  farm  tenants. 
Such  an  increase  in  the  number  of  tenants  has  been  by  recruits  from 
the  ranks  of  wage  employees,  and  not  from  farm  owners  or  their 
children.  The  class  of  owners  has  increased  faster  than  the  portion 
of  the  families  of  former  owners  who  have  remained  on  the  farms. 
The  same  is  true  of  the  tenant  class.  .  .  .  This  marked  decrease 
clearly  indicates  that  the  gain  in  the  number  of  farm  tenants  has 
been  due  to  recruits  drawn  from  the  ranks  of  wage  laborers  and  not 
from  the  ranks  of  farm  owners. " — Twelfth  Census  of  the  United 
States,  Vol.  V,  p.  Ixxvii. 

•Distribution  of  homes  in  the  United  States  in  1900: 
Homes  owned.  ^TZnA  ^^^^^  -'^^^^ 

4,739,914  2,180,229  8,240,747 

—Twelfth  Census,  Vol.  II,  p.  662. 


THE  NEW  SERFDOM  79 

ton,  Brooklyn,  Fall  River,  Jersey  City,  and  Memphis 
more  than  four-fifths  of  the  population  live  in  rented 
homes.  In  the  city  of  Buffalo  the  percentage  of 
homes  owned  by  the  occupiers  free  from  mortgage 
fell  from  21.1  per  cent,  in  1880  to  15.8  per  cent,  in 
1900.  In  Milwaukee  a  similar  loss  is  shown,  while  in 
St.  Paul,  one  of  the  new  cities  of  the  West,  the  loss  in 
mortgage-free  homes  was  25  per  cent,  in  the  decade. 
Speaking  generally,  there  was  a  larger  proportion  of 
homes  encumbered  in  1900  than  in  1890.  In  Man- 
hattan Borough  out  of  383,726  homes  only  15,361 
were  owned  by  their  occupants;  while  of  these  only 
6,305  are  owned  by  the  occupants  free  from  mortgage 
or  other  encumbrance.  Taking  the  tenure  of  thirty- 
eight  leading  cities  of  the  United  States,  we  find  the 
distribution  to  be  as  follows: 


HOMES  OWNED,  OWNED, 

FREE  MORTGAGE! 

347,005  306,505  2,259,304 


FREE  MORTGAGED  RENTED 


This  loss  in  home  ownership  is  not  confined  to  any 
one  section  of  the  country.  It  characterizes  Massa- 
chusetts as  well  as  California;  it  appears  in  Kansas 
as  well  as  in  Florida.  Out  of  a  total  aggregate  of 
613,659  homes  in  Massachusetts  but  207,579  are 
owned  by  their  occupiers,  and  of  these  only  109,494 
are  free  from  encumbrance.  The  remainder  are  hired 
or  held  subject  to  mortgage.  In  Pennsylvania  out 
of  1,320,025  aggregate  homes  but  328,989  are  owned 
free,  or  one-fourth  of  the  total.    In  Kansas,  a  state 


80  PRIVILEGE  AND  DEMOCRACY 

of  generous  fertility,  new  conditions,  and  widely 
heralded  recent  prosperity,  but  one  home  out  of  three 
is  owned  free,  and  less  than  60  per  cent,  are  owned 
at  all  by  those  who  occupy  them/ 

As  is  to  be  expected,  the  newer  states  show  a 
larger  percentage  of  ownership  than  do  the  older 
commonwealths.  Free  home  ownership  is  lowest 
in  the  north  Atlantic  division  of  states,  being  only 
22.3  per  cent.  It  rises  in  the  north  central  division 
to  35.3  per  cent.,  while  the  western  division  shows  a 
still  further  increase  to  42.7  per  cent.  Free  ownership 
is  lowest  in  New  Jersey,  the  District  of  Columbia, 
Massachusetts,  and  New  York.  It  is  highest  in  the 
far  Western  territories,  rising  to  80.5  per  cent,  in 
Alaska,  66.9  per  cent,  in  New  Mexico,  and  but  little 
less  in  Oklahoma,  Idaho,  and  Utah. 

It  is  apparent  that  we  are  rapidly  becoming  a 
homeless  people,  differing  only  in  degree  from  the 
tenants  of  Ireland  and  England,  of  Russia  and 
Germany,  of  Spain  and  Italy.  No  constitutions  or 
bills  of  rights  can  protect  us  from  the  operation  of 
economic  laws;  no  guarantee  of  personal  liberty  will 

•The  following  table  of  states  taken  from  the  Twelfth  Census, 
Vol.  II,  indicates  the  conditions  of  home  ownership  in  1900: 


Total  homes, 
owned 

Total  homes, 
hired 

Homes  owned, 

free  f.om 
encumbrance 

Massachusetts    . 

207,579 

385,959 

109,494 

New  York     .     . 

528,152 

1,061,267 

280,673 

Ohio    .... 

484,142 

437,618 

318,553 

Nebraska       .    , 

121,465 

92,479 

71,617 

Kansas     .     .     . 

184,150 

127,565 

117,351 

Georgia     ,     .     . 

130,205 

294,830 

101,494 

THE  NEW  SERFDOM  81 

avail  against  the  relationship  of  landlord  and  tenant 
so  long  as  the  land  is  subject  to  private  monopoly. 
Already  one-half  of  the  people  of  America  are  tenants. 
The  growth  of  population  will  increase  their  number. 
Future  generations  will  have  no  alternative  but  to 
pay  the  price  which  is  demanded  by  those  who  own 
the  soil.  This  tribute  will  increase  with  each  on- 
coming generation.  From  now  on  the  father  of  a 
family  will  look  forward,  not  to  increasing  oppor- 
tunity for  his  children,  but  to  an  ever-increasing 
burden  to  be  paid  to  those  who  own  the  land. 

This  tendency  will  be  further  stimulated  by  other 
causes.  Up  to  the  present  time,  the  franchises  of 
our  cities,  the  financing  of  railways  and  transporta- 
tion agencies,  the  exploitation  of  the  mineral  re- 
sources have  offered  the  most  inviting  fields  for 
capital.  Here  returns  were  most  immediate.  But 
the  transportation  agencies  have  been  consolidated, 
the  mining  opportunities  have  been  appropriated, 
the  land  has  been  denuded  of  its  forests,  and  the 
cities  despoiled  of  their  franchises.  The  develop- 
ment of  the  future  will  be  in  the  line  of  further  con- 
solidation or  the  perfection  of  operation.  More- 
over, so  long  as  free  land  existed  in  the  West,  agri- 
cultural land  was  of  little  value.  Rent  was  slow 
to  rise.  Men  would  not  willingly  work  for  another 
when  they  could  work  for  themselves.  But  the  vir- 
gin prairies  are  now  enclosed.  Future  generations 
must  find  their  homes  on  land  already  appropri- 


82  PRIVILEGE  AND  DEMOCRACY 

ated.  This  will  stimulate  agricultural  rent.  This 
is  already  apparent.  It  has  been  remarked  by  the 
Census  Office  and  the  Agricultural  Department,  which 
report  a  tremendous  increase  in  land  values  in  the 
last  few  years.  The  millions  of  dividends  which 
are  pouring  into  the  money  centres  will  now  find 
their  way  into  land  speculation.  For  land  is  the 
safest  of  all  investments,  and  capitalistic  agriculture 
is  profitable.  Moreover,  land  has  become  a  monop- 
oly, a  monopoly  not  yet  so  complete  as  other  indus- 
tries, but  none  the  less  a  monopoly.  From  now  on, 
therefore,  we  may  expect  increasing  investments  in 
land  and  a  constant  growth  in  the  plantation  system. 
This  change  marks  a  revolution  in  the  economic 
foundations  of  American  society.  It  is  the  most 
revolutionary  change  that  could  be  imagined.  For 
the  universal  opportunity  which  for  three  centuries 
America  offered  to  all  the  world  has  finally  come  to 
an  end. 


CHAPTER  VII 
SOME  OF  THE  COSTS  OF  TENANCY 

Agricultural  tenancy  is  more  precarious  in 
America  than  in  any  country  in  Europe.  Tenure  is 
subject  to  the  arbitrary  will  of  the  owner.  There 
is  nothing  to  check  the  operation  of  the  law  of  de- 
mand and  supply,  nothing  to  protect  the  tenant  in 
his  occupancy.  In  many  of  the  countries  of  Europe 
the  traditions  of  feudalism  have  softened  the  rela- 
tions of  landlord  and  tenant.  Competition  has  been 
mitigated  by  the  long-continued  occupancy  of  the 
land  by  certain  families.  The  hand  of  the  landlord 
is  restrained  by  this  fact.  In  some  countries  rents 
have  remained  fixed  during  long  periods  of  time. 
Custom  has  established  a  fair  rent.  It  may  not  be 
changed  except  by  agreement  with  the  tenant. 

In  Ireland  an  attempt  has  been  made  to  re- 
establish by  statute  the  idea  of  customary  rents,  to 
give  security  to  the  tenant,  to  indemnify  him  for  his 
improvements,  and  to  protect  him  from  the  landlord. 
Tribunals  have  been  created  with  power  to  fix  rents 
at  a  reasonable  rather  than  a  competitive  figure. 
Provision  is  also  made  for  the  compulsory  purchase 
of  land,  and  its  resale  to  the  peasants  on  instalments, 
with  the  aim  of  creating  a  peasant  proprietary  class. 

83 


84  PRIVILEGE  AND  DEMOCRACY 

More  recently  similar  legislation  has  been  passed  for 
England,  by  the  aid  of  which  the  local  authorities 
may  acquire  land  in  large  areas  and  subdivide  it 
among  petty  proprietors. 

In  America  there  is  no  such  custom,  no  such  tra- 
dition of  the  personal  relations  of  feudalism,  no  such 
legislation  to  protect  the  agricultural  tenant  from  the 
increase  of  rent.  There  is  nothing  to  relieve  the 
struggle  for  existence  and  the  right  of  the  landlord 
to  charge  whatsoever  he  pleases.  And  it  is  doubtful 
if  the  Constitution  would  permit  any  such  fair-rent 
legislation.  The  landlord  can  dismiss  the  tenant  at 
will,  he  can  and  does  appropriate  all  of  the  im- 
provements which  have  been  made.  The  tenant 
has  no  right  to  an3^hing  which  has  become  fixed 
to  the  realty.  He  may  take  away  the  crops,  but 
nothing  more.  All  of  the  betterments  pass  to  the 
landlord. 

In  consequence  the  tenant  does  nothing  to  im- 
prove the  land.  He  makes  no  repairs.  He  culti- 
vates for  the  present  only,  he  selects  such  crops  as 
will  give  an  immediate  return  with  the  least  possible 
labor.  He  permits  the  buildings  and  improvements 
to  go  to  decay;  he  exhausts  the  land  itself  by  failing 
to  fertilize  it.  In  time  he  abandons  the  property 
because  it  is  no  longer  profitable. 

The  same  influences  lead  to  indifferent  cultivation. 
The  stimulus  of  security  is  absent.  The  tenant  is 
wasteful  and  careless.     His  rent  is  fixed  by  what  the 


SOME  OF  THE  COSTS  OF  TENANCY        85 

land  is  supposed  to  yield;  it  is  determined  by  what 
another  will  pay  for  the  same  holding.  If  he  in- 
creases its  fertility,  it  is  made  an  excuse  for  an 
increase  in  the  rent.  If  he  is  thrifty  and  indus- 
trious, if  he  makes  the  farm  more  attractive,  if 
he  drains  and  irrigates  it,  the  advantage  accrues 
to  the  owner  or  to  some  other  tenant  who  will 
offer  an  increased  rent  for  the  property  because 
of  his  exertions. 

Agricultural  land  in  America  is  usually  rented 
from  year  to  year.  The  tenant  is  subject  to  eviction 
upon  a  few  months'  notice.  He  has  not  even  the 
security  of  a  long-time  grant.  There  is  nothing  to 
stimulate  his  pride,  nothing  to  awaken  his  interest. 
Every  incentive  is  lacking.  Competitive  tenancy, 
such  as  everywhere  exists  in  America,  is  utterly  de- 
structive to  good  farming;  it  leads  to  indifference 
on  the  part  of  the  worker,  and  a  rapid  deterioration 
in  the  farm  itself. 

These  conditions  are  already  common  in  many 
parts  of  the  country.  The  tenant  farm,  with  its 
dilapidated  buildings,  with  barns  and  fences  going 
to  decay,  with  fields  badly  cultivated  or  grown  up 
with  weeds,  may  be  seen  in  any  section  of  the  East. 
The  tenant  farmer  is  but  little  better  off  than  the 
worker  in  the  city;  he  can  rarely  accumulate  any 
capital  or  make  any  provision  for  the  morrow.  He 
has  little  more  security  in  his  position  than  the  farm 
laborer. 


86  PRIVILEGE  AND  DEMOCRACY 

The  Public  Lands  Commission,  appointed  by  Pres- 
ident Roosevelt,  has  described  in  very  moderate 
language  the  extent  and  effect  of  tenancy  in  the 
West.    The  report  says: 

"The  disastrous  effect  of  this  system  [of  tenant  cul- 
tivation] upon  the  well-being  of  the  nation  as  a  whole 
requires  little  comment.  Under  the  present  condi- 
tions, speaking  broadly,  the  large  estates  usually  re- 
main in  a  low  condition  of  cultivation,  whereas  under 
actual  settlement  by  individual  home-makers,  the 
same  land  would  have  supported  many  families  in 
comfort,  and  would  have  yielded  far  greater  returns. 
Agriculture  is  a  pursuit  of  which  it  may  be  asserted 
absolutely,  that  it  rarely  reaches  its  best  develop- 
ment under  any  concentrated  form  of  ownership. 

"There  exists  and  is  spreading  in  the  West  a  ten- 
ant or  hired-labor  system  which  not  only  represents 
a  relatively  low  industrial  development,  but  whose 
further  extension  carries  with  it  a  most  serious 
threat.  Politically,  socially,  and  economically  this 
system  is  indefensible.  Had  the  land  laws  been 
effective  and  effectually  enforced,  its  growth  would 
have  been  impossible. 

"It  is  often  asserted  in  defence  of  large  holdings 
that,  through  the  operation  of  enlightened  selfish- 
ness, the  land  so  held  will,  eventu-ally,  be  put  to  its 
best  use.  Whatever  theoretical  considerations  may 
support  this  statement,  in  practice  it  is  almost  uni- 
versally untrue.  Hired  labor  on  the  farm  cannot 
compete  with  the  man  who  owns  and  works  his  land, 
and  if  it  could,  the  owners  of  large  tracts  rarely  have 
the  capital  to  develop  them  effectively. 

"Although  there  is  a  tendency  to  subdivide  large 
holdings  in  the  long-run,  yet  the  desire  for  such 


SOME  OF  THE  COSTS  OF  TENANCY         87 

holdings  is  so  strong  and  the  behef  in  their  rapid  in- 
crease in  value  so  controlling  and  so  widespread, 
that  the  speculative  motive  governs,  and  men  go  to 
extremes  before  they  will  subdivide  lands  which  they 
themselves  are  not  able  to  utilize.  "^ 

Bad  as  these  conditions  are,  they  are  only  begin- 
ning to  appear.  Land  is  still  relatively  cheap.  Popu- 
lation is  still  far  from  dense.  The  free  homestead  in 
the  West  and  the  demands  of  industry  have  relieved 
the  demand  for  land.  From  now  on,  however,  agri- 
cultural rent  is  bound  to  increase.  In  time  compe- 
tition will  be  carried  to  such  a  point  that  agriculture 
will  suffer.  The  worker  will  not  be  able  to  save 
enough  to  stock  and  maintain  the  farm.  He  will 
abandon  those  crops  which  require  a  capital  outlay 
for  the  coming  season,  and  will  limit  his  planting 
to  those  which  are  most  easily  harvested.  Com- 
petition will  go  even  further  than  this.  With  in- 
creasing population  the  worker  will  offer  a  greater 
share  of  the  produce,  or  a  higher  rent  for  the 
land,  than  he  can  produce.  He  will  do  this  as  a 
means  of  escape  from  starvation,  or  to  prevent 
another,  as  hungry  as  himself,  from  taking  the 
land  from  him. 

Ireland  is  the  country  in  whose  history  we  can 
best  study  the  results  of  competitive  agricultural 
tenancy.  From  her  experience  we  can  forecast  our 
own.   For  here  as  there  no  limit  existed  to  the  right 

*  Senate  Document  No.  154,  58th  Congress,  3d  session,  p.  14. 


88  PRIVILEGE  AND  DEMOCRACY 

of  the  owner  to  do  as  he  willed  with  his  land.  John 
Stuart  Mill  has  thus  described  the  conditions  of  com- 
petitive tenancy  in  Ireland: 

^'It  is  scarcely  possible,"  he  says,  ''that  cottier 
[competitive  tenancy]  agriculture  should  be  other 
than  miserable.  .  .  .  The  competition  for  land  makes 
the  tenants  undertake  to  pay  more  than  it  is  possible 
they  should  pay,  and  when  they  have  paid  all  they 
can,  more  almost  always  remains  due. 

'''It  may  fairly  be  said  of  the  Irish  peasantry,' 
said  Mr.  Revans,  the  secretary  of  the  Irish  Poor 
Law  Enquiry  Commission,  'that  .  .  .  the  rents 
which  they  promise,  they  are  almost  invariably  in- 
capable of  paying;  and,  consequently,  they  become 
indebted  to  those  under  whom  they  hold,  almost  as 
soon  as  they  take  possession.  They  give  up  in  the 
shape  of  rent  the  whole  produce  of  the  land,  with  the 
exception  of  a  sufficiency  of  potatoes  for  a  subsist- 
ence; but  as  this  is  rarely  equal  to  the  promised  rent, 
they  constantly  have  against  them  an  increasing 
balance.  In  some  cases,  the  largest  quantity  of 
produce  which  their  holdings  ever  yielded,  or  which, 
under  their  system  of  tillage,  they  could,  in  the  most 
favorable  seasons,  be  made  to  yield,  would  not  be 
equal  to  the  rent  bid;  consequently,  if  the  peasant 
fulfilled  his  engagement  with  his  landlord,  which  he  is 
rarely  able  to  accomplish,  he  would  till  the  ground 
for  nothing,  and  give  his  landlord  a  premium  for 
being  allowed  to  till  it.  .  .  .  The  full  amount  of  the 
rent  bid,  however,  is  rarely  paid.  The  peasant  re- 
mains constantly  in  debt  to  his  landlord;  his  mis- 
erable possessions — the  wretched  clothing  of  himself 
and  of  his  family,  the  two  or  three  stools,  and  the  few 
pieces  of  crockery  which  his  wretched  hovel  contains 
would  not,  if  sold,  liquidate  the  standing  and  gener- 


SOME  OF  THE  COSTS  OF  TENANCY       89 

ally  accumulating  debt.  .  .  .  Should  the  produce  of 
the  holding,  in  any  year,  be  more  than  usually  abun- 
dant, or  should  the  peasant,  by  any  accident,  be- 
come possessed  of  any  property,  his  comforts  cannot 
be  increased;  he  cannot  indulge  in  better  food  nor 
in  a  greater  quantity  of  it.  His  furniture  cannot  be 
increased,  neither  can  his  wife  or  children  be  better 
clothed.  The  acquisition  must  go  to  the  person 
under  whom  he  holds.' 

*'As  an  extreme  instance  of  the  intensity  of  com- 
petition for  land,  and  of  the  monstrous  height  to 
which  it  occasionally  forced  up  the  nominal  rent, 
we  may  cite  from  the  evidence  taken  by  Lord 
Devon's  Commission,  a  fact  attested  by  Mr.  Hurly, 
clerk  of  the  Crown  for  Kerry:  'I  have  known  a 
tenant  bid  for  a  farm  that  I  was  perfectly  well 
acquainted  with,  worth  £50  a  year;  I  saw  the 
competition  get  up  to  such  an  extent  that  he  was 
declared  the  tenant  at  £450.' 

''In  such  a  condition  what  can  a  tenant  gain  by 
any  amount  of  industry  or  prudence,  and  what  lose 
by  any  recklessness?  If  the  landlord  at  any  time 
exerted  his  full  legal  rights,  the  cottier  would  not  be 
able  even  to  live.  If  by  extra  exertion  he  doubled 
the  produce  of  his  bit  of  land,  or  if  he  prudently  ab- 
stained from  producing  mouths  to  eat  it  up,  his  only 
gain  would  be  to  have  more  left  to  pay  to  his  land- 
lord; while  if  he  had  twenty  children  they  would 
still  be  fed  first,  and  the  landlord  could  only  take 
what  was  left.  Almost  alone  amongst  mankind  the 
cottier  is  in  this  condition,  that  he  can  scarcely  be 
either  better  or  worse  off  by  a'ny  act  of  his  own.  If 
he  were  industrious  or  prudent,  nobody  but  his  land- 
lord would  gain;  if  he  is  lazy  or  intemperate,  it  is 
at  his  landlord's  expense.  A  situation  more  devoid 
of  motives  to  either  labor  or  self-command,  imagina- 


90  PRIVILEGE  AND  DEMOCRACY 

tion  itself  cannot  conceive.  The  inducements  of  free 
human  beings  are  taken  away,  and  those  of  a  slave 
not  substituted.  He  has  nothing  to  hope,  and  noth- 
ing to  fear,  except  being  dispossessed  of  his  holdings, 
and  against  this  he  protects  himself  by  the  ultima 
ratio  of  a  defensive  civil  war.  Rockism  and  White- 
boyism  were  the  determination  of  a  people,  who 
had  nothing  that  could  be  called  theirs  but  a  daily 
meal  of  the  lowest  description  of  food,  not  to  sub- 
mit to  being  deprived  of  that  for  other  people's 
convenience. 

''  Is  it  not,  then,  a  bitter  satire  on  the  mode  in  which 
opinions  are  formed  on  the  most  important  prob- 
lems of  human  nature  and  life,  to  find  public  instruc- 
tors of  the  greatest  pretensions  imputing  the  back- 
wardness of  Irish  industry,  and  the  want  of  energy  in 
the  Irish  people  in  improving  their  condition,  to  a 
peculiar  indolence  and  insouciance  in  the  Celtic  race? 
Of  all  vulgar  modes  of  escaping  from  the  considera- 
tion of  the  effect  of  social  and  moral  influences  on  the 
human  mind,  the  most  vulgar  is  that  of  attributing 
the  diversities  of  conduct  and  character  to  inherent 
natural  differences.  What  race  would  not  be  indo- 
lent and  insouciant  when  things  are  so  arranged 
that  they  derive  no  advantage  from  forethought  or 
exertion?  If  such  are  the  arrangements  in  the  midst 
of  which  they  live  and  work,  what  wonder  if  the 
listlessness  and  indifference  so  engendered  are  not 
shaken  off  the  first  moment  an  opportunity  offers 
when  exertion  would  really  be  of  use?  ...  It  speaks 
nothing  against  the  capacities  of  industry  in  human 
beings  that  they  will  not  exert  themselves  without 
motive.  No  laborers  work  harder  in  England  or 
America  than  the  Irish;  but  not  under  a  cottier 
system. "  ^ 

'  Principles  of  Political  Economy,  Bk.  II,  chap.  9. 


SOME  OF  THE  COSTS  OF  TENANCY        91 

Such  are  the  logical  and  inevitable  results  of  com- 
petitive tenancy.  The  condition  of  the  peasant 
farmer  in  England  is  but  little,  if  any,  better  than 
that  of  the  cottier  in  Ireland.  He  is  subject  not 
only  to  industrial  but  political  and  religious  subjec- 
tion to  his  landlord.  On  the  Continent  the  same  is 
true.  Much  of  the  land  of  Belgium  is  held  on  short- 
time  leasehold.  The  tenant  has  somewhat  more  se- 
curity than  the  Irish  cottier,  but  he  is  rack-rented 
nevertheless.  Emile  de  Laveleye,  the  celebrated 
Belgian  economist,  said  of  the  system  which  prevails 
in  that  country: 

''The  tenant  is  not  encouraged  to  improve,  and 
if  he  does  make  improvements  he  can  hardly  be 
said  to  reap  the  benefits  of  them.  The  landlords 
will  not  grant  longer  leases,  because  they  want,  in 
the  first  place,  to  keep  a  hold  upon  their  tenants; 
and  secondly,  to  raise  the  rents  when  the  leases 
expire.  It  may  be  said,  that  throughout  Belgium 
such  increases  of  rent  take  place  regularly  and  peri- 
odically."^ This  process  of  rent  increase  is  proven 
by  statistics.  From  all  of  the  provinces  of  Belgium 
the  average  rent  per  one  hundred  acres  of  land 
increased  in  thirty-six  years  from  $11.45  per  unit 
to  $20.40,  or  nearly  one  hundred  per  cent.  Unlike 
Ireland,  Belgium  blossoms  like  the  rose.  It  is  won- 
derfully  productive.    Yet   the   population   of   the 

> "  Systems  of  Land  Tenure  in  Various  Countries, "  Cobden  Club 
Essays,  p.  466. 


92  PRIVILEGE  AND  DEMOCRACY 

country  is  the  most  illiterate,  in  many  ways  the  most 
poverty-stricken  and  miserable,  of  any  in  western 
Europe.  *'I  think  it  is  certain/'  says  Professor 
Laveleye,  "ihsit  the  Flemish  farmer  is  much  more 
ground  down  by  his  landlord  than  the  Irish  tenant."^ 

One  has  only  to  cross  the  borders  into  Holland  to 
find  an  entirely  different  state  of  affairs.  Holland, 
like  Denmark  and  Switzerland,  is  a  land  of  comfort, 
high  degree  of  education,  and  happiness.  Laveleye 
says  of  this  country:  '^The  farmers  of  Holland 
lead  a  comfortable,  well-to-do,  and  cheerful  life. 
They  are  well-housed  and  excellently  clothed.  They 
have  chinaware  and  plate  on  their  sideboards,  tons 
of  gold  at  their  notaries,  public  securities  in  their 
safes,  and  in  their  stables  excellent  horses.  Their 
wives  are  bedecked  with  splendid  corals  and  gold. 
They  do  not  work  themselves  to  death.  On  the  ice 
in  winter,  and  at  the  Kermesses  in  summer  they  en- 
joy themselves  with  the  zest  of  men  whose  minds  are 
free  from  care."^ 

The  reason  assigned  by  M.  de  Laveleye  for  the  pros- 
perity of  the  Dutch  farmers  in  comparison  with  the 
Belgian  is  that  the  land  in  Holland  has  remained  al- 
most entirely  in  the  hands  of  the  peasants,  who  work 
their  lands  for  themselves  rather  than  for  another. 
They  do  not  fear  an  increase  in  rent  with  every  im- 
provement in  production  nor  eviction  in  favor  of 
another  willing  to  offer  a  higher  rent  for  the  land. 

^Cobden  Club  Essays,  supra,  p.  483.  *Idem,  p.  133. 


SOME  OF  THE  COSTS  OF  TENANCY        93 

It  is  true  America  has  not  yet  reached  the  condi- 
tions described  in  Ireland  and  Belgium.  The  ulti- 
mate results  of  competitive  tenancy  have  not  yet 
appeared.  The  free  lands  of  the  West  have  kept 
down  rents.  It  has  offered  an  outlet  for  the  East. 
But  America  already  has  a  large  tenant  class.  The 
number  of  renters  is  bound  to  increase  and  increase 
with  great  rapidity.  This  is  inevitable.  For  the 
land  is  practically  all  enclosed  and  population  is  in- 
creasing with  no  sign  of  abatement. 

Ultimately,  as  in  Ireland,  the  operation  of  the  law 
of  demand  and  supply  will  reduce  the  standard  of 
living  of  the  tenant  to  the  lowest  point.  The  sum 
which  men  will  offer  for  the  use  of  the  land  will  be 
determined,  just  as  is  the  price  of  a  loaf  of  bread 
among  starving  men.  Millions  in  Europe  are  al- 
ready offering  all  save  a  potato  diet  for  the  mere 
right  to  work  upon  another's  land.  And  millions 
more  have  promised  more  than  they  could  possibly 
produce  in  order  that  they  might  anticipate  a  hun- 
gry competitor.  It  is  this  struggle  for  the  land  that 
is  sending  the  population  of  Russia,  Hungary,  Ger- 
many, and  Italy  to  America  to-day.  And  it  is  only  a 
matter  of  time  when  the  conditions  which  they  have 
left  behind  will  reappear  in  their  new  home. 


CHAPTER  VIII 
THE  EVOLUTION  OF  SERFDOM 

History  has  touched  but  lightly  on  the  evolution 
of  private  property  in  land.  Yet  the  introduction 
of  this  idea  and  its  development  into  a  system  of 
tenure  is  probably  the  most  important  social  fact 
in  the  history  of  Christendom.  It  has  moulded 
modern  society.  It  explains  the  rise  and  fall  of  na- 
tions. It  is  the  cause  of  vice,  misery,  and  poverty. 
In  a  large  view  of  history  the  changes  which  have 
taken  place  in  the  customs  and  laws  of  land  tenure 
are  of  colossal  import  to  society. 

The  beginnings  of  private  land  ownership  in  its 
present  form  are  definite  and  clear.  They  are  trace- 
able to  the  last  three  centuries  of  the  Roman  repub- 
lic, when  the  -senatorial  class  appropriated  the 
public  lands  of  Italy  to  themselves,  and  converted 
the  free  citizens  into  tenants  and  slaves  through  the 
monopoly  of  the  land  and  the  law  of  debt. 

During  these  centuries  the  Roman  law  became  a 
completed  system.  It  reflected  the  economic  in- 
terests of  the  ruling  classes.  It  sanctioned  the  ab- 
solute private  ownership  of  the  land  and  destroyed 

the  early  traditions  of  economic  freedom. 

94 


THE  EVOLUTION  OF  SERFDOM  95 

Through  colonial  expansion  the  plantation  system 
of  the  later  republic  was  carried  to  the  furthermost 
corners  of  Europe.  Roman  law  and  Roman  legis- 
lation became  the  basis  of  the  jurisprudence  of  a 
great  part  of  the  modern  world.  It  was  assimilated 
into  the  barbarian  codes.  It  underlies  the  Code 
Napoleon,  as  well  as  the  imperial  law  of  Germany. 
It  was  fused  into  the  common  law  of  England.  The 
methods  of  land  tenure  of  Europe,  of  the  United 
States  and  Australasia,  all  trace  their  lineage  back 
to  the  patrician-made  laws  of  the  Roman  senate, 
designed  to  dispossess  the  Roman  people  from  their 
common  lands.  ''The  Romans  were  the  first,"  ac- 
cording to  Laveleye,  ''to  establish  exclusive  individ- 
ual property  in  land,  and  the  principles  they  adopted 
on  this  subject  still  serve  as  the  basis  of  law  for  Con- 
tinental states. "  ^ 

Historians  differ  as  to  the  sources  of  the  feudal 
system.  It  is  certain,  however,  that  by  the  fourth 
century  A.  D.  most  of  the  land  in  the  empire  was  in 
the  hands  of  the  senatorial  nobility  of  Rome.^  It 
was  divided  into  great  estates,  just  as  it  had  been 
in  Italy.  The  free  owner  had  all  but  disappeared. 
The  land  was  worked  by  colonii,  or  by  serf  labor. 
As  the  imperial  power  declined,  the  plantation  own- 
ers assumed  sovereign  powers.  They  acted  as  mag- 
istrates and  dispensed  justice.    They  collected  such 

'  Primitive  Property,  p.  163. 

^  Medieval  Civilization,  Munro-Sellery,  p.  18. 


96  PRIVILEGE  AND  DEMOCRACY 

taxes  as  were  paid,  and  provided  their  quota  of  men 
in  time  of  war. 

Here  was  the  relation  of  lord  and  vassal.  Here 
was  the  hierarchical  organization  of  society  about  the 
manor.  When  the  barbarian  hordes  settled  upon  the 
territory  occupied  by  Roman  colonists  they  found 
a  political,  social,  and  industrial  system,  which,  as 
years  went  on,  developed  into  the  feudal  system. 
For  the  Roman,  like  the  feudal,  system  was  based 
upon  the  manor. 

The  Roman  idea  of  private  ownership  under  the 
manorial  system  came  into  conflict  with  the  German 
idea  of  common  ownership  under  the  village  com- 
munity. For  the  barbarians  had  no  conception  of 
the  absolute  private  ownership  of  the  land.  Among 
them  the  land  was  owned  in  common  by  the  village. 
''The  families  forming  the  community  had  only  the 
right  of  enjoyment,  the  ownership  of  the  soil  resting 
in  the  community  itself."  ^  The  idea  that  one  indi- 
vidual might  appropriate  a  part  of  the  earth's  surface, 
and  do  with  it  as  he  willed,  seems  never  to  have  oc- 
curred to  these,  or  to  any  other  early  people.  It 
was  not  permitted  to  one  person,  more  aggressive 
than  his  neighbors,  to  become  the  lord  proprietor  of 
an  immense  estate,  and  pass  it  on  from  generation  to 
generation  and  from  century  to  century,  and  ex- 
clude his  fellows  from  its  use.  Equality  of  economic 
opportunity  was  the  most  fundamental,  as  it  was  the 

*  Primitive  Property,  Laveleye,  p.  106. 


THE  EVOLUTION  OF  SERFDOM  97 

most  universal,  idea  of  early  society.  Like  the  right 
to  breathe  the  air  and  enjoy  the  sunlight,  the  land  was 
the  common  possession  of  all.  It  was  designed  for 
use,  not  for  ownership.  The  motive  of  early  society 
was  production.  He  who  would  use  the  land  was 
preferred  to  him  who  would  not.  Each  oncoming 
generation  was  thus  assured  an  opportunity  as  full 
and  as  free  as  its  predecessor. 

It  was  the  communal  ownership  of  the  land  that 
explains  the  essential  democracy  of  early  European 
peoples,  just  as  it  was  the  free  public  land  of  America 
that  lies  at  the  basis  of  our  own  democracy.  There 
was  little  or  no  hereditary  rank  among  the  early 
Teutons,  save  that  which  attached  to  age  or  charac- 
ter. The  leader  was  the  first  among  equals.  His 
authority  was  the  authority  of  superior  ability  or 
wisdom.  In  the  tribal  organization  every  freeman 
had  a  voice.  This  democracy  of  the  Teutonic  peoples 
was  economic.  It  sprang  out  of  the  common  owner- 
ship of  the  soil.  It  is  this  that  explains  the  democ- 
racy and  comparative  well-being  of  the  people  of 
Switzerland.  ^'In  the  primitive  cantons  of  Switzer- 
land," says  Laveleye,  '^institutions  of  the  most 
democratic  character  conceivable  have  secured  the 
inhabitants  from  the  most  remote  times  in  the  enjoy- 
ment of  liberty,  equality,  and  order,  and  as  great  a 
degree  of  happiness  as  is  compatible  with  human 
destinies.  This  exceptional  good-fortune  is  attribu- 
table to  the  fact  that  ancient  communal  institutions 


98  PRIVILEGE  AND  DEMOCRACY 

have  been  preserved,  and  with  them  the  primitive 
communal  ownership."  ^ 

The  village  community,  with  its  common  owner- 
ship of  the  land,  is  one  of  the  most  universal  insti- 
tutions of  society.  Sir  Henry  Maine  says  :  '^It  is 
known  to  be  of  immense  antiquity.  In  whatever 
direction  research  has  been  pushed  in  Indian  terri- 
tory, it  has  always  found  the  community  in  exist- 
ence at  the  farthest  point  of  its  progress.  .  .  .  Con- 
quests and  revolutions  seem  to  have  swept  over  it 
without  disturbing  or  displacing  it,  and  the  most 
beneficent  systems  of  government  in  India  have 
always  been  those  which  have  recognized  it  as  a 
basis  of  administration."  Under  it 'Hhe  personal 
relations  to  each  other  of  the  men  who  compose 
it  are  indistinguishably  confounded  with  their  pro- 
prietary rights. "  ^  The  village  community  is  to  be 
found  in  Russia  to-day,  where  it  is  said  'Ho  be  a 
nearly  exact  repetition  of  the  Indian  community. " ' 
Research  has  found  this  idea  of  the  common  owner- 
ship of  the  land  in  Russia,  Germany,  Great  Britain, 
Ireland,  Switzerland,  and  Scandinavia.  It  has  been 
found  in  Java,  in  Mexico,  and  in  Peru,  as  well  as  in 
New  Zealand,  India,  and  Africa. 

In  early  Britain  the  same  was  true.  The  land  of 
the  township  belonged  to  the  village.  Each  free- 
man had  a  homestead  of  his  own.    This  land  was 

'  Primitive  Property,  Laveleye,  p.  62. 

^Ancient  Law,  p.  231.  ^Idern,  p.  237. 


THE  EVOLUTION  OF  SERFDOM  99 

separated  from  the  common  stock.  Around  about 
the  enclosure  lay  the  arable  land.  It  was  divided 
into  fields  whose  use  was  allotted  to  the  members 
of  the  community.  These  allotments  were  used  for 
farming,  and  from  seed-time  to  harvest  were  under 
the  control  of  the  freemen  to  whom  they  had  been 
assigned.  There  was  individual  ownership  of  the 
crops,  but  not  in  the  land.  After  the  harvest  had 
been  gathered  the  land  was  thrown  open  for  pastur- 
age, to  be  used  by  all.^ 

Under  this  system  of  land  tenure  rent  was  un- 
known. The  land  belonged  to  all.  That  one  man 
should  collect  tribute  from  another  for  the  use  of  that 
which  nature  had  provided  for  the  community  did  not 
enter  the  imagination  of  early  peoples.  It  was  this 
sort  of  industrial  democracy  that  came  into  conflict 
with  the  land  laws  of  Rome.  In  this  conflict  the 
village  community  of  the  Germans  was  destroyed. 
It  was  destroyed  by  the  plantation  system  of  the 
Romans.  The  Roman  landlord  became  the  feudal 
overlord;  the  German  freeman  degenerated  into  the 
Latin  tenant.  Feudalism  with  its  hierarchical  organ- 
ization of  classes  was  the  result.  Common  owner- 
ship of  the  land  was  lost  to  humanity. 

Such  would  seem  to  be  the  obvious  explanation  of 
the  origin  of  feudalism.  Such  an  explanation  is  con- 
firmed by  the  tenacity  with  which  people  cling  to 
their  ideas  of  property.    And  of  all  laws  those  re- 

'  The  Agricultural  Community  of  the  Middle  Ages,  E.  Nasse,  p.  10. 


100  PRIVILEGE  AND  DEMOCRACY 

lating  to  land  tenure  are  the  most  immutable.  Re- 
ligion and  language  may  be  abandoned.  Forms 
of  government  and  the  ideals  of  a  people  may  be 
altered.  But  the  methods  of  land  tenure  persist. 
They  are  carried  by  the  emigrant  to  his  new  home. 
They  take  root  when  other  ideas  are  abandoned.  We 
see  this  in  the  persistence  of  the  common  law,  which 
has  spread  out  from  England  over  the  whole  western 
world  and  carried  with  it  the  system  of  English 
land  tenure. 

During  the  centuries  which  followed  the  disinte- 
gration of  the  Roman  Empire  feudalism  became  a 
system  of  organized  society.  It  was,  primarily,  an 
economic  system.  About  the  system  of  land  tenure 
the  political,  religious,  and  industrial  institutions  of 
Europe  were  erected.  The  union  of  lord  and  vassal 
was  one  of  mutual  service  and  protection.  The 
tenant  bore  arms  in  the  time  of  war.  He  served 
the  master  in  time  of  peace.  At  the  same  time  the 
lord  engaged  to  protect  the  vassal.  Both  had  obli- 
gations, both  had  rights. 

But  the  land  was  still  far  from  private  property. 
The  great  baron  held  his  land  from  the  king  by  the 
performance  of  certain  duties,  just  as  the  lesser 
vassals  held  their  lands  from  the  baron  by  similar 
services.  These  services,  whether  military,  personal, 
or  servile,  were  the  nexus  of  society.  They  were  fixed 
by  custom.  They  were  the  same  as  taxes,  for  the 
lack  of  money  precluded  the  existence  of  any  revenue 


THE  EVOLUTION  OF  SERFDOM  lOl 

system.  The  basis  of  all  relations  was  the  land. 
This  was  the  economic  foundation  of  the  feudal  order. 
All  of  the  activities  and  relations,  whether  political, 
social,  or  industrial,  sprang  from  this  fact. 

The  distinguishing  thing  about  the  feudal  tenure 
was  the  joint  ownership  of  the  land  by  the  crown, 
the  lord,  and  the  vassal.  Neither  the  one  nor  the 
other  was  the  absolute  owner.  The  tenure  of  the 
great  baron  was  the  same  as  the  vassal's.  Along 
with  the  Roman  ownership  of  the  land  by  the  lord 
there  survived  certain  Germanic  ideas  of  the  common 
ownership  by  the  people.  Every  person  had  to  serve 
some  one  above  him  as  a  condition  of  his  occupancy. 
Each  class  had  certain  fixed  rights  and  obligations. 
These  obligations  could  not  be  changed,  the  services 
could  not  be  increased,  the  occupancy  of  the  land 
could  not  be  taken  away,  except  by  agreement. 
Absolute  private  ownership  of  the  land,  as  we  un- 
derstand it,  did  not  obtain.  There  was  a  blending  of 
the  common  ownership  of  the  Germans  with  the  ab- 
solute ownership  of  the  Romans.  It  was  this  that 
distinguished  the  land  tenure  of  the  Middle  Ages 
from  that  which  preceded  it,  and  from  that  which  we 
have  to-day. 

But  this  condition  did  not  continue.  If  it  had,  the 
land  of  Europe  would  still  be  jointly  held  by  all  the 
people,  subject  to  certain  fixed  rents  in  the  form  of 
taxes  to  the  state.  The  rights  of  the  vassals  on  the 
one  hand  and  of  the  crown  on  the  other  were  de- 


102  PRIVILEGE  AND  DEMOCRACY 

stroyed.  The  rights  of  both  were  absorbed  by  the 
feudal  barons,  who  became  the  absolute  owners  of 
the  land,  just  as  they  are  to-day.  The  Roman  law 
destroyed  the  Germanic  custom.  By  the  eighteenth 
century  almost  all  of  the  land  of  Europe  was  held  in 
great  estates  as  exclusive  private  property. 

This  change  did  not  take  place  in  a  year  or  in  a 
generation,  but  in  a  series  of  generations,  just  as  rail- 
way monopoly  in  America  is  the  product  of  an  un- 
conscious evolution  covering  a  long  period  of  time. 
During  the  sixteenth  and  seventeenth  centuries  the 
use  of  money  became  general.  The  personal  services 
of  the  feudal  order  were  converted  into  money  rent. 
The  vassal  ceased  to  pay  for  his  land  in  service.  He 
now  paid  in  cash.  The  use  of  money  also  made  pos- 
sible the  substitution  of  a  paid  army  for  military 
duties.  This  absolved  the  barons  from  their  ser- 
vices to  the  crown.  The  economic  framework  of  so- 
ciety still  centred  about  the  land.  But  the  lord 
was  freed  from  taxes  and  services,  while  the  vassal 
became  a  competitive  cash  tenant. 

Modern  landlordism  had  its  beginning  in  these 
changes.  The  personal  relations  of  the  vassal  to  the 
lord  as  well  as  of  the  lord  to  the  king  were  destroyed. 
The  lords  came  to  treat  the  land  as  their  own.  They 
lost  all  sense  of  obligation  to  their  tenants.  As  pop- 
ulation grew,  so  did  the  demand  for  land.  The  lords 
substituted  competitive  rents  for  services  fixed  by 
custom,    The  freeman  lost  his  security  of  tenure  and 


THE  EVOLUTION  OF  SERFDOM  103 

with  it  his  customary  though  Hmited  ownership  of 
the  land.  The  landlord  now  charged  as  much  rent 
as  was  possible.  He  was  limited  only  by  what  an- 
other would  pay  for  the  land.  The  vassal  became 
a  tenant  at  his  will.  He  might  be  evicted  at  the 
whim  or  caprice  of  the  owner.  He  now  had  to  com- 
pete with  his  fellows  for  that  which  had  formerly 
been  partly  his  own.  He  gained  his  personal 
freedom,  but  he  lost  materially  by  the  destruction 
of  his  ownership  in  the  land. 

The  importance  of  this  change,  which  reached  its 
culmination  in  the  seventeenth  and  eighteenth  cen- 
turies, cannot  be  exaggerated.  Through  it  every 
vestige  of  the  common  or  village  ownership  of  the 
land  was  destroyed.  The  free  yeoman  was  reduced 
to  the  position  of  a  rack-rented  tenant.  He  could 
move  from  place  to  place,  but  he  could  not  move  off 
from  the  face  of  the  earth.  Instead  of  the  great 
mass  of  serfs  being  raised  to  freedom,  all  of  the  free- 
men were  reduced  to  the  position  of  tenants.  Only 
the  symbols  were  changed.  In  many  ways  modern 
tenancy  is  more  oppressive  than  were  the  custom- 
ary relations  of  the  Middle  Ages.^ 

'  Under  the  feudal  regime  "  the  freeman  .  .  .  owed  nothing  to  the 
master;  they  were  dependent  upon  him  only  in  so  far  as  he  was  their 
landlord,  only  because  they  lived  upon  his  lands.  They  were  renters 
or  farmers  in  perpetuity.  Their  holding  was  a  fragment  of  the  great 
domain.  They  cultivated  it  for  their  profit,  on  the  condition  of  pay- 
ing either  a  fixed  amount,  like  our  farm  rents,  or  a  certain  part  of 
the  produce,  as  in  our  farming  on  shares.  Ln  distinction  from  the 
renter  or  farmer  of  our  day,  their  condition  was  fixed  forever;  the  land- 


104  PRIVILEGE  AND  DEMOCRACY 

Such  is  the  evolution  of  the  private  ownership  of 
the  land.  Such  are  the  means  by  which  the  unpriv- 
ileged classes  were  despoiled  by  their  rulers.  Such, 
too,  is  the  origin  of  rent,  the  modern  equivalent  of 
serfdom.  Both  private  ownership  of  the  land  and 
the  payment  of  rent  for  its  use  (aside  from  the  pay- 
ments of  services,  which  were  in  reality  payments 
or  taxes  to  the  state)  are  of  comparatively  recent 
origin.  Landlordism  made  its  way  out  of  feudalism, 
because  the  landed  classes  everywhere  controlled  the 
state.  Not  only  the  state  but  the  schools  and  the 
universities,  the  bench  and  the  bar,  the  Church  and 
all  of  the  agencies  of  public  opinion  as  well.  Those 
who  had  previously  ruled  by  force  now  ruled  by 
law.  Through  law  they  gave  a  solemn  sanction  and 
respect  for  their  decrees.  The  idea  of  obedience  was 
taught  by  the  Church  as  the  first  duty  of  man. 

Private  ownership  of  the  land  is  a  product  of  class 
legislation,  just  as  is  the  tariff,  just  as  are  the  great 
manorial  estates  which  have  been  stolen  from  the 
public  domain  in  the  West,  just  as  are  the  privileges 
which  have  been  conferred  upon  the  franchise  cor- 

lord  could  not  take  back  their  lands  or  increase  their  rent.  On  the  con- 
dition that  they  paid  the  old  charges,  they  were  free  to  dispose  of  their 
holding,  to  bequeath  it  as  they  would,  to  transfer  it,  even  (at  least  in 
France)  to  parcel  it  out.  .  .  .  The  difference  is  that  while  our  farmers 
have  but  a  precarious  position  and  are  in  danger  of  seeing  their 
charges  increased  at  the  end  of  the  lease,  the  tenant  of  the  middle 
ages  enjoyed  an  assured  position,  encumbered  only  with  fixed 
charges.  He  was  consequently  in  a  firmer  position,  one  that  was 
nearer  to  ownership." — The  Feudal  Regime,  by  Charles  Seignobos, 
pp.  13  and  25. 


THE  EVOLUTION  OF  SERFDOM  105 

porations  and  water-power  companies  of  America 
to-day.  The  ideas  of  the  private  ownership  of  the 
land  and  of  rent  for  its  use  are  merely  an  evidence 
of  the  long-continued  control  of  the  governments  of 
Europe  by  the  land-owning  classes.  They  are  not 
an  evidence  of  progress  or  of  reason,  of  custom  or  of 
popular  sanction.  The  genesis  of  private  ownership 
of  lands  is  to  be  found  in  force  and  in  fraud. 


CHAPTER  IX 
THE  TYRANNY  OF  THE  DEAD 

The  feudal  system  is  not  yet  ended.  No  more 
ended  than  is  the  idea  of  kingship  in  the  countries 
of  Europe.  No  more  ended  than  is  the  Church. 
The  feudal  regime  has  persisted  from  the  eighteenth 
century  into  the  twentieth,  just  as  it  persisted 
from  the  fourteenth  century  to  the  fifteenth.  It 
altered  its  forms  in  the  latter  centuries  just  as  it 
did  in  the  former.  The  substance  has  remained  the 
same  from  the  tenth  century  down  to  date,  only  it 
casts  a  different  shadow.  The  use  of  money,  the 
absence  of  many  servile  obligations  and  services,  the 
shifting  of  the  military  power  from  the  great  nobility 
to  the  crown,  the  substitution  of  a  standing  army  for 
personal  military  service — all  these  have  altered  the 
appearance  of  the  feudal  relationship. 

But  the  essence  of  the  feudal  system  is  and  ever 
has  been  the  power  of  one  class  to  live  upon  the 
labor  of  another  class  without  giving  any  service  in 
return.  The  two  characteristics  of  the  feudal  system 
have  ever  been  the  support  of  the  privileged  orders 
by  rent,  and  the  maintenance  of  the  crown  by  taxes, 
by  the  labor  of  the  unprivileged  masses.  These  ob- 
ligations have  ever  been  the  brand  of  the  servile 

lOG 


THE  TYRANNY  OF  THE  DEAD  107 

class.  All  other  elements  were  non-essential.  The 
personal  ties,  oaths,  and  obligations  which  bound 
the  serf,  vassal,  and  overlord  were  to  feudalism  what 
the  Thirty-nine  Articles  are  to  the  Anglican  Church. 
The  rendition  of  service  was  its  essence.  It  was  the 
three  or  five  days  a  week  labor  on  the  estates  of  the 
lord;  it  was  the  payment  of  toll  upon  the  bridges, 
of  tribute  at  the  markets,  at  the  mill,  and  the  wine- 
press; it  was  the  beating  of  the  marshes  at  night  in 
order  that  the  sleep  of  the  lord  might  not  be  dis- 
turbed by  the  frogs — it  was  these  things  that  feudal- 
ism meant  to  the  vassal. 

Democracy  has  cast  off  the  shadows  of  class  rule, 
but  has  retained  the  substance.  It  is  as  though  the 
government  should  confiscate  such  counterfeit  coin 
as  fell  into  its  hands,  but  should  solemnly  place  the 
hall-mark  of  its  approval  on  the  dies  from  which  it  is 
coined.  We  have  not  changed  the  economic  founda- 
tions of  life,  however  much  we  have  altered  the  po- 
litical forms. 

Were  it  not  for  the  veneration  for  the  past  and  the 
respect  which  property  enjoys,  we  should  see  that  the 
private  ownership  of  the  land  and  indirect  taxation 
have  ever  been  the  agencies  of  oppression.  It  is 
through  these  means  that  peoples  have  ever  been 
kept  in  subjection.  But  we  refuse  to  question  the 
things  that  are.  In  religion,  in  law,  in  politics,  prog- 
ress has  to  make  its  way  against  the  generations 
which  are  long  since  dead. 


108  PRIVILEGE  AND  DEMOCRACY 

This  veneration  for  the  past  is  always  strongest 
where  the  property  rights  of  the  ruling  class  are 
involved.  Macaulay  has  somewhere  said  that  if 
it  were  to  the  interest  of  an  ascendant  class  to 
deny  the  law  of  gravitation,  there  would  arise  an 
organized  resistance  to  its  acceptance.  It  would 
be  challenged  as  impious,  as  contrary  to  the  law 
of  God.  It  would  be  treated  as  at  variance  with 
the  laws  of  nature.  Those  who  defended  it  would 
be  shunned.  All  preference  would  be  closed  against 
them.  They  would  suffer  as  did  Galileo  and  Bruno 
for  daring  to  defend  the  theory  of  the  revolution  of 
the  earth  in  the  face  of  the  opposition  of  the  holy 
Church. 

We  fancy  we  are  free  from  this  reverential  at- 
titude in  America.  Yet  America  is  ruled  by  the 
political  ideas  of  our  grandfathers.  The  temple  of 
Delphi  was  scarcely  more  sacred  to  the  ancient 
Greeks  than  the  Federal  Constitution  is  to  us.  Criti- 
cism is  almost  sacrilege.  Yet  a  recent  examination 
of  the  circumstances  surrounding  its  adoption  shows 
that  the  Federal  Constitution  was  not  intended  to  be 
a  democratic  instrument.*  It  was  not  designed  that 
the  people  should  rule.  The  reactionary  spirits 
who  had  taken  small  part  in  the  Revolution  ob- 
tained control  of  the  Constitutional  Convention,  and 
impressed  their  will  upon  that  body.  And  as  later 
interpreted  by  the  courts  the  Constitution  has  be- 

•  The  Spirit  of  American  Government,  J.  A.  Smith,  p.  27. 


THE  TYRANNY  OF  THE  DEAD  109 

come  even  more  reactionary  than  its  language  im- 
ports or  its  makers  designed. 

It  was  this  veneration  for  propertied  wrong  that 
continued  negro  slavery  far  into  the  nineteenth  cen- 
tury. It  was  only  yesterday  that  slavery  could  not 
be  discussed  with  safety.  Even  in  the  Northern 
states  belief  in  its  abolition  involved  personal  vio- 
lence. In  some  sections  of  the  country  the  protec- 
tive tariff  enjoys  something  of  the  same  sanctity. 
It  may  not  be  discussed  in  the  university,  certainly 
not  in  the  pulpit.  The  franchise  corporations  of 
our  cities  environ  themselves  with  the  same  power- 
ful influences,  which  close  the  press,  the  clubs,  the 
legal  professions,  and  every  avenue  of  preferment  to 
those  who  dare  to  question  the  most  arrogant  de- 
mands of  their  owners.  That  which  was  true  of 
slavery,  of  piracy,  and  of  the  gentlemanly  pursuit  of 
highway  robbery  in  the  generations  which  are  gone, 
is  true  of  many  of  the  most  accepted  institutions  of 
to-day. 

The  lineage  of  rent  is  far  less  honorable  than  is  that 
of  chattel  slavery,  for  slavery  has  had  the  approval 
of  almost  every  nation  and  of  every  religion.  But 
the  private  ownership  of  the  land  and  the  collection 
of  rent  for  its  use  is  of  comparatively  recent  origin. 
And,  as  we  have  seen,  it  arose  under  such  conditions 
as  give  it  a  questionable  claim  upon  posterity. 

It  is  true  the  tenant  of  to-day  does  no  labor  in  the 
fields  of  his  overlord;  he  is  free  from  physical  insult 


110  PRIVILEGE  AND  DEMOCRACY 

and  molestation;  his  lands  may  not  be  shot  over 
nor  his  crops  destroyed ;  he  need  not  grind  his  grain 
at  the  mill  of  the  lord,  nor  do  menial  services  in  his 
household;  he  is  not  subject  to  personal  services  at 
every  turn,  as  he  was  in  France  prior  to  the  Revolu- 
tion. All  these  burdens  of  a  personal  sort  have  been 
swept  away.  The  methods  of  payment  have  been 
changed,  but  the  servitude  remains  as  it  was  in  the 
days  of  the  Normans  or  of  the  Plantagenets.  Rent 
has  taken  the  place  of  the  spear  or  the  arrow;  it  has 
taken  the  place  of  personal  and  military  services. 
The  origin  of  rent  is  perfectly  definite  and  clear.  And 
to-day,  as  during  the  Middle  Ages,  it  is  paid  by  those 
who  labor  to  those  who  do  not.  It  is  paid  by  all  those 
who  do  not  participate  in  the  ownership  of  the  land. 
We  shudder  at  the  inhumanity  of  the  French 
nobles,  who  muzzled  their  serfs  in  order  that  they 
might  not  eat  of  the  corn  which  they  ground  at  the 
mill.  We  protest  against  the  cruelty  of  the  absentee 
landlords,  who  dissipated  in  idle  luxury  the  exhaust- 
ing rack-rents  wrung  from  their  starving  Irish  ten- 
ants. We  sympathize  with  the  peasantry  of  Russia, 
and  aid  by  contributions  and  monster  mass-meetings 
their  revolt  against  the  oppression  of  the  aristocracy. 
Yet  the  suffering,  the  hunger,  and  the  oppression 
which  seems  so  terrible  at  a  distance  is  not  very  dis- 
similar from  that  which  is  to  be  found  in  America 
to-day.  There  is  famine  in  New  York  and  in 
Chicago,  in  the  mining  regions  and  the  mill   dis- 


THE  TYRANNY  OF  THE  DEAD  111 

tricts  of  America,  just  as  there  is  famine  in  Russia, 
in  Poland,  and  in  Ireland.  And  the  cause  is  the  same 
in  each  country.  There  was  food  enough  in  Ireland 
during  the  famine.  Millions  of  produce  were 
shipped  out  of  the  country  to  pay  rent  when  the 
peasantry  were  dying  of  hunger  by  the  tens  of 
thousands.  There  was  wealth  in  abundance  for  the 
landlords  at  a  time  when  there  was  not  even  a  po- 
tato diet  for  those  who  produced  whatever  wealth 
the  country  contained.  And  the  infant  mortality, 
which  carries  away  the  children  of  the  tenements  like 
a  plague,  is  famine — famine  in  the  midst  of  plenty, 
just  as  it  was  in  Ireland,  just  as  it  is  in  Russia  and 
India  to-day.  For  the  steamship  and  the  telegraph 
have  made  all  the  world  a  counter.  There  can  be 
no  famine  among  a  people  who  have  the  means  with 
which  to  purchase  food.  And  it  was  not  the  failure 
of  food,  it  was  the  burden  of  rent  which  produced  the 
Irish  famine  of  sixty  years  ago,  just  as  it  is  the  bur- 
den of  rent  which  sends  60,000  famished  children 
to  school  in  the  metropolis  of  America  every  day. 

Were  it  not  that  our  eyes  are  blinded  by  this  prop- 
erty sense,  we  should  see  that  the  right  of  the  sluna 
owner  to  his  rent  had  its  origin  in  the  days  when  men 
were  serfs;  when  society  was  ruled  by  force,  and 
legislation  had  its  origin  in  craft  and  fraud. 

The  feudal  state  still  persists  in  its  essential  quali- 
ties. For  the  worker  in  New  York  still  labors  two 
days  out  of  every  seven  for  his  overlord  in  order 


112  PRIVILEGE  AND  DEMOCRACY 

that  he  may  be  permitted  to  labor  five  days  for  him- 
self. The  corvee  is  still  exacted  as  ruthlessly  as  it 
was  in  the  eighteenth  century.  The  worker  still 
labors  one  day  more  out  of  every  seven  in  order  to 
support  the  nation;  not  only  to  pay  his  own  taxes, 
imposts,  and  octroi  on  his  food,  but  to  pay  those  of 
his  overlord  as  well,  who  escapes  their  payment  just 
as  did  the  grand  seigneur  in  France. 

Measured  by  its  size  the  tribute  of  to-day  is  vastly 
heavier  than  it  was  in  the  days  of  the  ancient  regime. 
It  is  figured  in  millions  instead  of  in  thousands.  It  is 
still  paid  by  the  vassal  to  the  lord.  It  still  supports 
an  idle  aristocracy  in  the  capitals  of  the  world,  just 
as  it  did  the  French  nobles  at  Versailles.  The  rent- 
rolls  of  New  York  run  into  the  hundreds  of  millions 
each  year.  They  are  paid  for  the  use  of  the  earth, 
just  as  they  were  two  or  ten  centuries  ago.  And 
they  are  collected  with  far  more  precision  and  with 
much  less  hazard  than  at  any  time  in  the  history 
of  mankind. 


CHAPTER  X 
THE  SERVITUDE  OF  TO-MORROW 

We  have  seen  how  the  private  ownership  of  the 
land  was  evolved  from  the  common  ownership  of 
the  land  through  the  control  of  the  governments  of 
Europe  by  the  feudal  aristocracy;  how  tenancy  is 
but  the  cash  equivalent  of  the  earlier  relationship  of 
lord  and  vassal,  of  master  and  serf,  a  relationship 
which  historians  assume  was  destroyed  in  the  sev- 
enteenth and  eighteenth  centuries.  We  have  further 
seen  how  competitive  rents  have  been  substituted 
for  the  customary  services  of  an  earlier  age,  by  means 
of  which  those  who  use  the  land  are  subject  to  an 
increasing  tribute  for  the  privilege  of  living  upon 
the  earth. 

Private  land  ownership  is  now  complete.  This  is 
true  of  practically  all  the  world.  Those  who  come 
after  us  must  come  as  trespassers.  They  must  pay 
a  competitive  price  for  the  right  to  live.  Future 
generations  will  be  born  into  servitude.  Permission 
to  work  must  now  be  had  of  another,  a  permission 
which  can  only  be  secured  on  the  payment  of  a 
price,  and  a  price  determined  by  the  competition 
of  another  for  the  same  opportunity.  It  is  competi- 
tion that  fixes  rent,  and  it  is  the  power  of  the  owner  to 

113 


114  PRIVILEGE  AND  DEMOCRACY 

exact  such  tribute  as  he  wills  that  distinguishes  the 
servitude  of  to-day  from  that  of  the  feudal  regime. 

We  can  now  forecast  the  struggle  which  the  future 
holds  in  store  for  America.  The  supply  of  land  is 
fixed  and  constant.  It  is  the  same  to-day  as  it  was 
four  centuries  ago  when  Columbus  first  set  foot  upon 
the  continent.  No  ingenuity  of  man  can  add  a 
square  foot  to  the  earth's  surface.  Better  means  of 
transit,  greater  ease  of  communication,  the  reclama- 
tion of  the  desert  places  of  the  West,  all  these  have 
increased  the  area  available  for  cultivation.  But 
the  amount  of  land  remains  as  it  was  when  the  last 
discoverer  opened  up  the  last  continent  to  human 
habitation. 

The  uncertain  element  in  the  equation  is  the  de- 
mand. This  is  indicated  by  the  census  returns. 
The  decennial  enumeration  of  peoples  will  deter- 
mine the  fierceness  of  the  struggle  for  existence  and 
the  price  which  must  be  paid  for  the  use  of  the  earth. 
The  birth  rate  is  the  barometer  by  which  the  returns 
of  the  landlord  may  be  measured. 

We  need  not  go  beyond  the  Civil  War  to  see  the 
rapidity  of  the  growth  of  population.  From  1860  to 
1870,  during  one-half  of  which  time  the  nation  was 
convulsed  with  civil  war  and  maintained  more  than 
a  million  men  under  arms,  the  population  increased 
from  31,443,321  to  38,558,371,  or  22.6  per  cent. 
During  the  following  decade,  a  decade  which  was 
coincident  with  the  expansion  of  the  West  and  the 


THE  SERVITUDE  OF  TO-MORROW        115 

projection  of  the  Pacific  Railway  systems,  11,597,412 
people  were  added  to  the  population,  or  an  increase  of 
30.1  per  cent.  By  1890  the  population  had  mounted 
up  to  62,622,250,  or  an  increase  of  24.9  per  cent.; 
while,  by  the  close  of  the  century,  75,994,575  claimed 
allegiance  to  the  United  States,  or  an  increase  of 
20.7  per  cent.  In  forty  years'  time  the  population 
had  increased  over  141  per  cent.  If  the  population 
increases  as  rapidly  during  the  present  decade  as  it 
did  during  the  last,  America  will  contain  92,024,430 
people  in  1910.  At  the  same  rate  of  growth  another 
19,417,154  will  be  added  by  1920.  Continuing  this 
increase,  the  population  of  America  will  amount  to 
134,955,658  souls  in  1930 ;  to  163,430,301  in  1940, 
and  to  197,914,094  in  1950,  or  two  and  a  half  times 
the  present  population.  By  the  middle  of  the  cen- 
tury, at  the  present  rate  of  growth,  nearly  200,000,- 
000  people  will  be  struggling  for  the  right  to  live  in 
America.  But  even  then  people  will  be  living  at  a 
density  of  but  67  per  square  mile,  which  is  far 
from  crowded  in  comparison  with  other  countries 
or  the  Eastern  states  of  America.  For  to-day  the 
population  of  Massachusetts  is  348  per  mile;  of 
Pennsylvania,  140  per  mile;  of  Ohio,  102  per  mile; 
and  of  Wisconsin,  38  per  mile.  The  population  of  the 
German  Empire  is  280  per  mile;  of  France,  188  per 
mile;  and  of  little  Holland,  425  per  mile. 

With  every  babe  that  is  born  the  value  of  the  land 
is  increased,  as  is  the  tribute  which  its  owners  com- 


116  PRIVILEGE  AND  DEMOCRACY 

mand  for  its  use.  The  ignorant  immigrant,  landing 
at  Castle  Garden,  possessed  of  nothing  save  the  cloth- 
ing suspended  across  his  shoulders,  increases  per- 
ceptibly the  value  of  the  soil,  upon  which  the  laws  of 
nature  decree  that  he  must  either  labor  or  starve. 
The  million  refugees  who  annually  crowd  to  America, 
driven  unwillingly  from  their  native  land,  add  to  the 
value  of  the  land  at  least  half  a  billion  dollars  a  year.^ 
Its  value  responds  to  their  coming.  There  are  so 
many  more  hands  to  labor,  so  many  more  mouths  to 
be  fed,  so  many  more  human  beings  to  struggle  for 
an  opportunity  to  live  upon  the  land  of  promise 
which  another  has  enclosed.  And  the  80,000,000 
already  here  are  made  the  poorer  by  their  coming. 
The  burden  of  rent  of  all  the  people  is  increased  in 
consequence.^ 

Herein  is  the  crux  of  the  social  puzzle.  Herein 
is  the  explanation  of  increasing  poverty  in  the  midst 

'  "  It  has  been  calculated  that  by  the  mere  fact  of  his  arrival  each 
emigrant  increased  by  about  $400  the  value  of  the  territory  of  the 
United  States. " — Charles  Gide,  Political  Economy,  p.  458.  This  is 
an  understatement.     It  is  nearer  $1,000. 

*  For  the  five  years  running  from  1900  to  1905,  the  aggregate  in- 
crease in  the  value  of  all  classes  of  farms  was  $6,131,000,000.  The 
cause  of  this  increase  in  land  values  is  indicated  in  the  Bulletin 
United  States  Department  of  Agriculture,  No.  44,  which  says: 
"While  the  public  land  suitable  for  farming  has  been  reaching  ex- 
haustion, the  flow  of  immigration  from  foreign  countries  has  been 
continuing  in  its  direction,  and  where  no  farming  land  could  be  ob- 
tained from  nation,  state,  or  railroad  the  influx  of  agricultural 
people  was  halted  in  regions  where  farms  had  been  established  in 
more  recent  years,  and  the  consequent  pressure  of  new  demand  upon 
a  fixed  area  increased  the  value  per  acre  during  the  five  years  often 
as  much  as  fifty  to  a  hundred  per  cent. " 


THE  SERVITUDE  OF  TO-MORROW        117 

of  increasing  wealth;  of  misery,  destitution,  and 
suffering  on  the  one  hand,  and  unimaginable  luxury 
and  waste  on  the  other.  In  this  struggle  for  the  use 
of  the  land  and  the  speculative  values  to  which  it 
gives  rise,  is  the  solution  of  the  paroxysms  of  indus- 
try which  periodically  afflict  the  commercial  world. 
It  is  this,  too,  that  explains  the  vacant  fields  and 
idle  workshops,  while  millions  of  men  are  seeking 
employment. 

It  makes  no  difference  whether  the  land  is  owned 
by  a  handful  of  ducal  proprietors  or  by  a  million 
petty  landlords,  whether  by  English  syndicates  or 
by  the  well-to-do  farmer  of  the  neighboring  county 
seat.  So  far  as  those  who  hereafter  come  into  the 
world  are  concerned,  the  result  is  the  same.  For  rent 
is  fixed  by  the  law  of  demand  and  supply;  supply 
ever  constant,  demand  increasing  year  by  year. 

This  law  of  demand  and  supply,  by  which  the 
dealings  of  the  business  world  are  conducted;  this 
law  which  operates  so  beneficently  in  most  instances, 
determining  with  the  precision  of  a  natural  law  the 
basis  on  which  the  products  of  labor  will  exchange, 
the  amount  of  food  and  clothing  which  will  be  pro- 
duced each  year,  as  well  as  the  output  of  ten  thou- 
sand factories,  mines,  and  workshops  located  in  the 
most  distant  portions  of  the  earth;  this  law,  which 
adjusts  production  and  exchange  with  a  precision 
almost  comparable  to  that  which  determines  the 
amount  of  rain  which  shall  fall  upon  the  surface  of  the 


118  PRIVILEGE  AND  DEMOCRACY 

earth,  is  a  very  cruel  thing  when  applied  to  the  first 
necessity  of  life  which  the  laws  of  nature  decree  must 
be  used  by  man  if  he  would  live,  but  which  the  laws 
of  man  permit  to  be  owned  by  the  generation  which 
first  appropriates  it. 

Under  natural  conditions  this  growth  in  popula- 
tion should  increase  the  well-being  of  all  the  people 
rather  than  the  well-being  of  the  few.  For  just  as 
the  fisherman  increases  his  catch  by  a  division  of 
labor,  which  frees  him  from  the  necessity  of  making 
his  net  or  of  preparing  his  meals;  just  as  the  hunter 
is  able  to  capture  more  game  when  relieved  of  the 
necessity  of  making  his  weapons,  so  the  productive 
power  of  society  has  been  increased  by  the  division 
of  labor  and  the  specialization  of  the  workers  which 
has  been  going  on  from  the  beginning  of  time.  The 
watch  we  are  now  able  to  buy  for  a  dollar  once  in- 
volved weeks  of  labor.  A  single  workman  is  now  so 
skilled  in  the  handling  of  looms  that  he  produces 
three  hundred  times  as  much  as  was  possible  a 
century  ago.  The  cotton-spinner  produces  as  much 
as  did  three  hundred  and  twenty  men  in  1769.  One 
operator  in  a  cotton  factory  supplies  the  wants  of 
two  hundred  and  fifty  men;  in  a  woollen  factory,  of 
three  hundred  men,  and  in  a  shoe  factory,  of  one 
thousand  men.  A  single  man  produces  more  iron, 
steel,  or  copper  than  did  a  hundred  a  generation 
ago;  he  produces  more  than  did  a  thousand  in  the 
seventeenth  century. 


THE  SERVITUDE  OF  TO-MORROW       119 

This  is  true  in  almost  every  line  of  industry. 
This  increase  in  the  productive  power  of  society 
should  have  long  since  banished  poverty.  For 
along  with  every  pair  of  hands  seeking  work  there 
are  bodies  to  be  clothed  and  stomachs  to  be  fed. 
Increasing  population  does  not  mean  increasing  pro- 
duction only;  it  means  increasing  consumption  as 
well.  And  the  wants  of  man  know  no  limit.  There 
can  be  no  such  thing  as  overproduction.  Even 
were  every  human  being  comfortably  housed,  ade- 
quately fed  and  clothed,  even  were  all  of  the  needs 
with  which  we  are  familiar  amply  provided  for,  there 
would  arise  a  multitude  of  wants  which  would  employ 
ten  times  our  present  population.  Yet  instead  of 
improving  the  well-being  of  society,  this  increase  in 
population,  increasing  as  it  does  the  value  of  the 
land  and  the  rent  which  must  be  paid  for  its  use, 
makes  of  necessity  for  poverty.  It  fills  the  tene- 
ments with  sweat-shop  workers,  and  the  mines  with 
child  laborers.  Some  obstacle  intervenes  to  prevent 
the  operation  of  the  natural  laws  of  production  and 
distribution;  some  influence  diverts  the  gains  of 
civilization  from  those  whose  labor  produces  them. 
This  influence  is  the  private  ownership  of  the  land 
which  withholds  the  storehouse  of  nature  from  use, 
and  appropriates  through  rent  every  increase  in  the 
productive  power  of  society. 

From  now  on  this  tribute  to  those  who  own  the 
land  must,  of  necessity,  increase.    With  every  babe 


120  PRIVILEGE  AND  DEMOCRACY 

that  is  born  and  with  every  immigrant  that  comes 
to  our  shores  the  struggle  for  a  place  to  live  and  to 
labor  will  be  reflected  in  the  value  of  the  land.  This 
will  increase  the  charge  which  may  be  exacted  for  its 
use.  This  is  the  inevitable  result  of  the  law  of  de- 
mand and  supply  when  applied  to  the  land,  for  rent 
is  established  by  the  same  law  that  fixes  the  ex- 
change price  of  a  loaf  of  bread  or  a  pair  of  shoes.  In 
time  rent  will  appropriate  all  that  the  worker  can 
produce  save  the  margin  of  subsistence,  below 
which  he  cannot  permanently  go.  Even  this  will 
not  be  secure,  for  men  will  offer  more  for  the  land 
than  they  can  produce  upon  it  in  the  hope  of  ward- 
ing off  starvation. 

This  tendency  is  already  manifest.  It  is  this  that 
explains  the  spirit  of  unrest  that  is  expressing  itself 
all  over  the  country.  John  Stuart  Mill  has  de- 
scribed the  result  of  increasing  population  in  the 
case  of  Ireland.  He  had  in  mind  the  agricultural 
workers.  But  the  result  is  the  same  in  any  country 
and  under  any  conditions  of  industry.  ''The  prod- 
uce of  the  cottier  (competitive)  system,"  he  says, 
''being  divided  into  two  portions,  rent  and  the  re- 
muneration of  the  laborer,  the  one  is  evidently  de- 
termined by  the  other.  The  laborer  has  what  the 
landlord  does  not  take;  the  condition  of  the  laborer 
depends  upon  the  amount  of  rent.  But  rent  being 
regulated  by  competition  depends  upon  the  relation 
between  the  demand  for  land  and  the  supply  of  it. 


THE  SERVITUDE  OF  TO-MORROW       121 

The  demand  for  land  depends  upon  the  number  of 
competitors,  and  the  competitors  are  the  whole  rural 
population.  The  effect,  therefore,  of  this  tenure  is 
to  bring  the  principle  of  population  to  act  directly 
on  the  land,  and  not,  as  in  England,  on  capital. 
Rent,  in  this  state  of  things,  depends  on  the  propor- 
tion between  population  and  land.  As  the  land  is  a 
fixed  quantity,  while  population  has  an  unlimited 
power  of  increase;  unless  something  checks  that  in- 
crease, the  competition  for  land  soon  forces  up  rent 
to  the  highest  point  consistent  with  keeping  the 
population  alive. "  ^ 

This,  then,  is  the  servitude  of  to-morrow.  It  is 
not  new  to  the  world.  But  it  is  only  since  the 
seventeenth  century  that  the  law  has  endowed  one 
man  with  legal  means  to  take  from  another  all  that 
he  could  get. 

The  extent  to  which  the  growth  of  population, 
the  improvements  in  the  arts  and  sciences,  the  in- 
crease in  the  productive  power  of  society,  have  ex- 
pressed themselves  in  the  value  of  the  land,  and  the 
amount  which  has  been  added  to  the  wealth  of  the 
few  by  the  exertions  of  the  many,  will  be  considered 
in  the  next  chapter. 

» Principles  of  Political  Economy,  chap,  9. 


CHAPTER  XI 
THE  UNEARNED  INCREMENT 

We  have  witnessed  the  changes  which  have  taken 
place  in  the  economic  foundations  of  democracy 
during  the  past  few  years;  we  have  seen  how  ten- 
ancy has  followed  close  upon  the  heels  of  three  cen- 
turies of  freedom  through  the  prodigal  waste  of  our 
land  and  resources;  we  have  projected  our  imagina- 
tion into  the  future  when  the  population  will  have 
doubled,  and  the  struggle  for  existence  will  have  in- 
creased in  intensity  through  the  demand  for  the  land, 
which  must  ever  remain  limited  in  amount.  We 
have  seen,  too,  how  the  growth  of  population  creates 
a  social  value  which  is  not  retained  by  the  commu- 
nity, but  is  appropriated  by  those  who  own  the  land. 

Such  is  the  process  by  which  organized  society  im- 
poverishes itself;  such  is  the  process  by  which  it  has 
always  done  so.  Such,  too,  are  the  means  by  which 
the  servitude  of  the  Middle  Ages  is  continued  down  to 
the  present  day,  for  we  are  the  lineal  heirs  of  serfdom, 
just  as  the  Church  and  the  jurisprudence  of  to-day  are 
the  heirs  of  many  of  the  abuses  of  the  Middle  Ages. 

But  the  growth  of  population  is  not  the  only 
agency  which  adds  to  the  wealth  of  those  who  own 
the  soil.     All  other  activities  contribute  to  it.     Good 

122 


THE  UNEARNED  INCREMENT     123 

government  reflects  its  goodness  in  the  value  of  the 
land.  It  increases  its  security  as  well  as  its  at- 
tractiveness for  homes  and  business.  The  opening 
up  of  streets  and  sewers,  the  dedication  of  parks  and 
open  spaces,  all  these  contribute  to  the  enrichment 
of  those  who  toil  not  nor  spin.  Even  the  education 
of  kindergarten,  school,  and  university,  the  building 
of  cathedrals  and  public  structures,  the  increase  in 
health  and  security,  all  these  are  reflected  back  into 
the  value  of  the  land,  and  must  be  paid  for  by  those 
who  make  use  of  it. 

The  progress  of  science  and  invention,  the  design- 
ing of  new  machines  for  increasing  the  wealth  of 
mankind,  all  these,  as  well  as  every  advance  in  civ- 
ilization are  passed  on  to  the  pockets  of  the  landlord. 
And  this  increased  wealth  which  society  contributes 
to  his  purse  is  as  unearned  by  him  who  appropriates 
it  as  was  the  manna  which  descended  from  heaven 
to  the  Hebrew  people.  It  enriches  the  most  barren 
of  building  sites  as  does  the  dew  upon  the  grass,  or 
the  ray  of  the  rising  sun  to  which  all  nature  responds. 
The  invention  of  the  Bessemer  process,  the  cheapen- 
ing of  the  means  of  transportation,  the  erection  of 
mammoth  iron  steamships,  the  expenditures  of  mill- 
ions of  dollars  by  the  Federal  Government  upon  the 
inland  waterways  of  America,  have  not  cheapened  the 
cost  of  iron  and  steel  to  the  consumer.  They  have 
but  added  tens  of  millions  of  value  to  the  iron  and 
the  coal  mines,  the  railways  and  the  harbors  owned 


124  PRIVILEGE  AND  DEMOCRACY 

by  those  who  sit  idly  upon  the  resources  of  the  earth 
which  they  have  been  permitted  to  monopoUze. 
Every  improvement  in  the  railways,  every  new  de- 
vice for  doing  the  work  of  human  hands,  has  added 
to  the  capital  value  of  the  land  and  the  mineral  re- 
sources of  the  country.  The  application  of  elec- 
tricity to  transit  upon  our  streets  has  not  solved  the 
housing  problem.  It  cheapened  the  cost  of  produc- 
tion to  the  owners  of  the  franchises.  It  increased  the 
value  of  city  and  suburban  land.  But  any  reduc- 
tion in  the  charges  for  transit  and  electricity,  for  gas 
and  for  water  is  ultimately  absorbed  by  the  owners 
of  the  land,  who  thwart  every  effort  for  the  relief  of 
housing  conditions  by  the  speculative  withholding 
of  building  sites.  Even  the  increased  efficiency  of 
labor  is  not  appropriated  by  capital.  The  capital- 
ist is  but  the  intermediary  through  whose  hands  the 
increasing  productivity  of  society  flows.  For  he, 
too,  like  the  wage-earner  and  the  tenant  farmer,  is 
subject  to  the  tribute  which  the  private  ownership 
of  the  land  involves. 

We  can  see  this  unearned  increment  which  society 
creates  most  readily  in  the  great  cities.  And  we  can 
visualize  it  in  the  fortunes  of  some  old  family.  The 
estate  of  the  Astors  in  the  city  of  New  York  is  a 
striking  example.  In  less  than  fifty  years'  time  the 
crowding  of  5,000,000  people  around  Manhattan 
Island  has  given  a  value  to  the  Astor  estate  of 
$450,000,000.    Scarce  a  century  ago  the  ancestor 


THE  UNEARNED  INCREMENT     125 

of  the  present  family  invested  a  few  thousand  dol- 
lars in  farming  lands  lying  about  the  outskirts 
of  what  was  then  a  mere  village.  Much  of  the 
property  so  acquired  was  barren  rock.  And  so  it 
has  remained  to  this  day.  In  itself  it  has  little  more 
value  than  the  rolling  prairies  in  Nebraska.  Since 
that  time  the  hand  of  man  has  added  little  to  its 
fertility.  No  modern  alchemy  has  changed  its  char- 
acter. The  land  is  much  as  it  was  when  the  glaciers 
of  a  distant  age  laid  it  bare  to  the  elements.  But  the 
growth  of  a  great  nation,  the  development  of  trade 
and  commerce,  the  revolutions  which  have  taken 
place  in  industry,  have  fertilized  this  granite  outcrop 
until  it  produces  golden  eagles  from  every  rod  of  its 
surface.  Society  has  done  what  the  Astor  family 
could  not  have  done,  even  with  the  lamp  of  Aladdin. 
And  society  has  done  everything  that  has  been  done 
to  make  the  land  valuable.  When  Jacob  Astor  died 
in  1848,  the  value  of  his  holdings  had  increased  until 
they  were  worth  $20,000,000.  A  quarter  of  a  cen- 
tury later  the  estate  had  grown  in  value  to  $100,- 
000,000.  By  1890  it  was  estimated  to  be  worth 
$250,000,000.  Seventeen  years  have  since  elapsed, 
and  in  that  time  the  struggle  of  mankind  for  a 
footing  on  this  most  densely  peopled  spot  in  the 
western  world  has  given  a  value  of  $450,000,000  to 
the  Astor  estate.^    ''In  fifteen  or  twenty  years,  at 

'"The  Astor  Fortune,"  by  B.  L.  Hendrick,  McClure's  Magazine, 
1905. 


126  PRIVILEGE  AND  DEMOCRACY 

the  present  rate  of  progress,  it  (the  Astor  estate)  will 
have  reached  the  billion  mark,  and  then  it  will  go  on 
even  faster,  till  the  ordinary  mind  is  appalled  at  the 
portentous  figures.  ...  If  the  same  rate  be  main- 
tained for  another  century,  the  Astor  fortune  will 
attain  the  unimaginable  total  of  $80,000,000,000."  ' 
The  insignificant  investment  of  a  century  ago  has 
multiplied  many  thousand  times.  And  by  means  of 
short  leases,  revalued  from  time  to  time,  the  values 
which  society  created  have  all  been  retained  by  the 
estate.  Public  improvements,  the  opening  up  of 
streets,  the  laying  out  of  parks  and  boulevards,  the 
development  of  transportation,  the  increase  in  secur- 
ity and  attractiveness,  all  of  the  expenditures  of  the 
metropolis,  have  passed  into  the  value  of  the  land. 
The  recently  opened  Subway,  which  was  paid  for  from 
out  the  city's  credit,  is  said  to  have  added  an  amount 
equal  to  its  cost  to  the  value  of  the  Astor  holdings.^ 

'The  Astor  estate  is  but  one  of  many  in  the  metropolis.  The 
vahie  of  the  land  underlying  the  city  staggers  the  imagination. 
A  short  time  ago  the  small  comer  lot  at  No.  1  Wall  Street  was  sold 
for  $700,000.  It  contains  about  1,170  square  feet.  Its  purchase 
price  was  about  $4.00  per  square  inch.  In  1902  the  building  site  at 
the  corner  of  Fifth  Avenue  and  28th  Street  was  sold  for  $400,000. 
Within  twelve  months  it  was  resold  for  $550,000.  To-day  its  value 
is  not  far  from  $1,000,000.  But  a  few  years  ago  the  land  upon 
which  the  Tunes  building  is  erected,  at  the  corner  of  Broadway  and 
42d  Street,  was  in  the  market  for  $500,000.  It  recently  sold  for 
nearly  three  times  this  figure.  Cases  of  this  sort  can  be  multiplied 
indefinitely,  from  the  Battery  to  the  Bronx. 

2 See  report  of  New  York  City  Club  entitled  "Building  of  Rapid 
Transit  Lines  in  New  York  City  by  Assessment  upon  Property  Ben- 
efited, "  which  showed  that  the  value  added  to  adjacent  land  by  the 
building  of  the  Subway  would  have  paid  its  cost  several  times  over. 


THE  UNEARNED  INCREMENT     127 

The  whole  of  Manhattan  Island  was  first  sold  to 
the  Dutch  by  the  Indians  for  $28.00.  In  1904  the 
land  values  of  Greater  New  York  were  appraised 
for  taxation  at  $3,057,161,290.  By  1906  the  land 
had  increased  in  value  to  $3,391,711,526.  In  two 
years'  time  $334,550,236  had  been  added  to  the 
fortunes  of  those  already  enriched  through  the  city's 
growth.  They  had  done  nothing  to  create  this  value. 
They  had  given  no  labor,  no  thought  to  the  develop- 
ment of  the  city.  Many  of  the  owners  lived  in  dis- 
tant parts  of  the  world.  The  growth  continued  just 
the  same.  By  1907  the  appraised  value  of  the  land 
underlying  the  city  had  advanced  to  $3,557,591,504, 
or  an  increase  over  the  year  before  of  $165,879,978. 
In  1908  the  valuation  had  still  further  increased  to 
$3,843,165,597,  or  an  increase  of  $284,271,643.' 

The  human  imagination  cannot  comprehend  such 
stupendous  figures.  The  total  area  of  the  city  is  but 
190,000  acres.  The  land  is  worth  $213,400  per  acre. 
One  acre  of  the  metropolis  would  buy  an  average 
farm  of  5,000  acres  in  extent.  The  land  values  of 
Greater  New  York  exceed  the  total  value  of  all  the 
buildings  and  improvements  in  the  city,  on  which 
generations  of  labor  have  been  expended,  by  over 
$700,000,000. 

In  1900  the  value  of  all  of  the  farm  property 
in  the  nine  states  of  New  York,  New  Jersey,  Penn- 

1  Taken  from  Annual  Reports  of  Commissioners  of  Taxes  and 
Assessments  of  New  York  for  these  years. 


128  PRIVILEGE  AND  DEMOCRACY 

sylvania,  Massachusetts,  Connecticut,  Maine,  New 
Hampshire,  Vermont,  and  Rhode  Island  was  but 
$2,950,532,628,  or  $607,058,876  less  than  the  value 
of  the  naked  land  in  New  York  City  in  1907.  This 
value  exceeded  by  nearly  $1,000,000,000  all  of  the 
capital  in  the  United  States  invested  in  machinery, 
tools,  and  implements  in  1900.  It  was  almost  equal 
to  the  value  of  all  the  farm  buildings  in  the  United 
States. 

This  narrow  point  of  land  which  forms  the  gate- 
way of  the  nation,  and  which  can  scarcely  be  dis- 
cerned upon  the  map,  exceeds  in  value  the  census 
appraisal  of  all  of  the  farming  land  with  the  improve- 
ments thereon  lying  to  the  east  of  the  Alleghany 
Mountains.  It  is  equal  to  one-sixth  of  the  total 
value  of  the  841,201,346  acres  of  improved  land  in 
the  United  States.  Into  these  farms  have  gone  three 
centuries  of  struggle.  They  represent  the  sacrifices 
of  the  pioneer,  of  the  log  cabin,  and  the  prairie 
schooner,  the  drought  and  the  scourge  of  the  West- 
ern prairie.  In  this  making  of  a  nation  are  all  the 
sacrifices  and  the  isolations,  the  struggles  and  the  dis- 
appointments, the  lack  of  opportunities  for  educa- 
tion, and  the  unceasing  toil  of  those  who  have  con- 
verted the  plains  of  America  into  fields  of  golden  corn 
and  grain.  Yet  a  few  thousand  landlords,  who  have 
possessed  themselves  of  a  spot  of  land  but  little 
larger  than  a  Western  township,  have  come  into  pos- 
session of  wealth  half  as  valuable  as  all  the  farm 


THE  UNEARNED  INCREMENT     129 

products  produced  in  a  single  year  in  the  United 
States. 

No  thrift  of  the  owners  created  this  value;  but 
the  coming  of  population,  the  development  of  com- 
merce and  industry,  the  perfection  of  the  arts  and 
sciences,  all  these  agencies  have  brought  into  exist- 
ence unearned  incomes  more  princely  than  that 
which  enabled  Crassus  to  unite  with  C2esar  and  Pom- 
pey  in  the  control  of  the  Roman  republic/ 

All  other  wealth  save  the  land  has  an  exchange 
value,  measured  by  its  labor  cost.  Under  free  com- 
petition, this  is  as  true  of  a  locomotive  or  of  a  monster 
steamship  as  it  is  of  a  pair  of  shoes  or  a  sack  of  flour. 
It  is  the  amount  of  labor  which  enters  into  each  that 
determines  the  price  at  which  it  exchanges.  But 
no  such  rule  fixes  the  annual  value  of  the  land. 
Rent  is  not  the  equation  of  labor  for  labor;  it  is  the 
resultant  of  a  certain  number  of  human  beings  seek- 
ing a  chance  to  live.  And  the  rent  that  is  paid  is  the 
price  exacted  by  those  who  own  from  those  whose  very 
labor  has  given  the  land  whatever  value  it  enjoys. 
Society  is  really  taxed  because  of  its  own  enterprise. 

'New  York  is  not  exceptional  in  this  regard.  In  1902  the  land 
and  the  franchises  of  the  city  of  Boston  were  appraised  at  $879,259,- 
355  or  $1,100  per  capita.  In  1906  they  had  increased  to  $1,047,- 
499,500.  In  city  after  city  where  assessments  assume  to  represent 
the  real  selling  value  of  property,  the  value  of  the  land  alone  amounts 
to  nearly  $1,000  per  head  of  the  population.  The  land  value  or 
social  value  of  America  in  city  and  country,  from  the  data  available, 
would  seem  to  amount  to  from  $750  to  $1,000  per  capita  for  every 
man,  woman,  and  child  in  the  country. 


130  PRIVILEGE  AND  DEMOCRACY 

In  reality  land  values  are  not  wealth  at  all.  They 
are  a  power  to  tax,  a  power  to  levy  tribute  upon 
the  wealth  which  others  produce.  Land  values  are 
merely  a  toll,  and  rent  is  in  the  nature  of  an  annual 
license  for  the  privilege  of  living,  which  the  laws  of 
the  land  permit  one  class  to  collect  from  those  who 
labor  upon  the  earth. 

Here,  too,  is  a  kind  of  wealth  whose  value  increases 
automatically.  It  is  a  form  of  monopoly  more  per- 
fect than  any  oil-,  beef,  or  sugar  trust.  It  requires  no 
syndicate,  no  understanding,  no  gentlemen's  agree- 
ment to  determine  what  the  traffic  will  bear;  no 
pooling  of  interests  or  division  of  territory  is  neces- 
sary for  the  fixing  of  tariffs.  The  tribute  which  the 
landowners  collect  is  determined  with  mathematical 
precision.  It  is  fixed  b}^  the  simple  law  of  demand 
and  supply,  and  the  letter  of  the  bond  is  collected  as 
ruthlessly  as  the  rack-rents  of  Ireland.^ 

The  Census  Department  has  recognized  the  phe- 
nomenal increase  in  land  values  which  is  every- 
where taking  place.    From  1900  to  1904  something 


>  We  can  see  the  growth  in  population  and  the  industry  of  a  people 
expressing  itself  in  the  value  of  the  land  in  the  newer  states  of  the 
West.  Within  the  past  few  years,  the  territory  of  Oklahoma  has 
been  opened  up  to  settlement.  Here  is  one  of  the  most  fertile  regions 
of  the  world.  In  the  early  nineties  land  was  selling  at  from  $2.00 
to  $5.00  an  acre.  To-day  it  is  changing  hands  at  from  $10.00  to 
$30.00  an  acre.  In  1900  the  assessed  value  of  the  farming  land  was 
$9,875,638.  To-day  it  is  assessed  at  $35,472,012.  (Report  of  the 
Governor  of  Oklahoma  to  the  Secretary  of  the  Interior,  1906.)  It 
is  probably  worth  ten  times  that  figure. 


THE  UNEARNED  INCREMENT     131 

less  than  one-half  of  the  acre  property  in  the  United 
States  increased  in  value  over  $1,500,000,000.  The 
growth  in  the  value  of  all  agricultural  land  was, 
therefore,  something  over  $3,000,000,000.  During 
the  same  period,  land  and  improvement  values  in 
city  as  well  as  country  increased  over  $9,000,000,000, 
which  means  that  the  land  values  of  the  nation  shot 
up  at  least  $4,500,000,000  in  four  years'  time.' 

This  is  a  very  conservative  estimate.  The  De- 
partment of  Agriculture  states  that  the  aggregate 
increase  in  the  value  of  all  classes  of  farms  during 
the  five  years  running  from  1901  to  1905  was 
$6,131,000,000.' 

We  see  the  same  social  values,  the  same  com- 
mon treasure,  in  the  value  of  the  mineral  resources 
of  America.  It  is  apparent  in  the  coal,  the  iron, 
and  the  copper  fields.  Twenty  years  ago  the 
barren  lands  of  northern  Minnesota,  Wisconsin,  and 
Michigan,  upon  which  the  Mesabi,  Vermillion,  Gego- 
bic,  and  Menominee  iron  ranges  were  discovered,  were 
practically  valueless.  But  the  demand  for  iron  and 
steel,  the  improvement  in  machines  and  transpor- 
tation, a  thousand  inventions  increasing  their  use, 
has  enabled  the  United  States  Steel  Corporation  to 
place  a  value  of  $700,000,000  upon  its  ore  fields  alone. 
The  president  of  the  company  testified  that  even  this 
value  was  inadequate.     He  stated  before  the  In- 

» Census  Reports,  "Wealth,  Debt,  and  Taxation,"  pp.  20  and  26. 
''Bulletin  No.  44,  "Local  Conditions  Aflfecting  Farm  Values." 


132  PRIVILEGE  AND  DEMOCRACY 

dustrial  Commission  that  the  ore  holdings  were 
worth  from  $1,000,000,000  to  $2,000,000,000/  We 
see  the  same  unearned  increment  in  the  Calumet 
and  Hecla  copper  mine.  Its  stock  was  issued  at 
$12,00  a  share.  It  is  now  selling  for  $650  a  share, 
and  has  sold  as  high  as  $1,000  a  share. 

Society  has  been  busy  by  night  as  well  as  by  day, 
and  a  steady  stream  of  wealth  has  been  flowing  into 
the  laps  of  those  who  happened  to  acquire  these 
marvellous  deposits.  The  Calumet  and  Hecla  is 
but  a  bonanza  mine  among  many  such  copper  de- 
posits which  are  to  be  found  in  Montana,  Utah, 
Arizona,  and  elsewhere,  whose  combined  values  are 
not  far  from  $500,000,000.  Less  than  a  century 
ago  the  anthracite  coal  fields  of  western  Pennsyl- 
vania were  opened  up  to  use.  For  fifty  years  they 
were  regarded  as  of  comparatively  little  value.  But 
through  the  consolidation  of  the  railway  systems 
entering  the  territory  and  the  complete  monopoly 
of  the  region,  these  resources  and  railways  have  been 
capitalized  at  over  a  half  billion  dollars. 

To  these  spectacular  exhibits  must  be  added  the 
bituminous  coal  fields  which  spread  from  the  Alle- 
ghanies  to  the  Rockies,  and  underlie  whole  com- 
monwealths with  their  rich  deposits;  as  well  as  the 
oil  wells  which  are  pouring  forth  wealth  of  fabulous 
value.  Hundreds  of  millions  more  should  be  added 
for  the  silver,  zinc,  lead,  and  other  minerals  whose 

'  Report  of  Industrial  Commission,  Vol.  XIII,  p.  472. 


THE  UNEARNED  INCREMENT     133 

value  is  constantly  increasing  through  the  needs  of 
humanity. 

But  the  land  and  mineral  resources  do  not  com- 
plete this  enumeration  of  the  unearned  increment. 
The  same  process  of  social  production  and  private 
appropriation  is  apparent  in  the  capitalization  of 
the  railways.  It  may  be  seen  in  the  swollen  secu- 
rities of  the  franchise  corporations.  Year  by  year 
evidences  of  ownership  are  issued  to  keep  pace  with 
the  value  which  the  growth  of  society  pours  into 
the  pockets  of  those  who  own  them.  No  new  wealth 
is  called  into  being  in  the  process.  The  country  is 
no  richer  by  reason  of  the  increased  securities  which 
are  issued.  In  1907  the  railways  of  the  country 
were  capitalized  at  $16,082,146,683.  Ten  years  ear- 
lier they  were  capitalized  at  but  $10,635,008,074. 
The  difference  is  largely  a  site  or  land  value  just 
like  that  which  a  corner  lot  enjoys.  The  increasing 
value  of  the  franchise  corporations  of  our  cities  is  of 
the  same  character.  It  is  a  social  product,  due  to 
the  favored  sites  which  the  public  utility  corpora- 
tions occupy.  The  value  of  their  securities  reflects 
the  growth  of  population.  The  unearned  incre- 
ment of  the  franchise  corporations  of  New  York 
City  runs  into  the  hundreds  of  millions  of  dollars.* 

'Mr.  John  Moody,  editor  of  Moody's  Manual,  says:  "The  pub- 
lic utiUty  corporations  of  New  York  City  cost  to  construct  less 
than  $200,000,000,  and  yet  to-day  they  are  capitalized  for  over 
$1,000,000,000."— "The  Evolution  of  the  Trust,"  The  Arena,  May, 
1907. 


134  PRIVILEGE  AND  DEMOCRACY 

What  is  true  of  the  city  of  New  York  is  true  of  all 
the  cities  of  America.  Franchises  for  street  rail- 
ways, for  gas,  water,  electric-lighting,  telephone, 
and  other  corporations  have  been  granted  by  cor- 
rupt or  ignorant  councils,  or  bestowed  upon  favor- 
ites by  the  legislatures  of  our  states,  much  as  the 
English  Stuarts  gave  away  the  property  of  the 
nation  to  the  worthless  favorites  of  the  king.  Yet 
the  privileges  bestowed  in  the  olden  days  were  of 
insignificant  value  in  comparison  with  the  princely 
gifts  of  our  cities,  many  of  them  in  perpetuity,  and 
all  of  them  for  long  periods  of  time.  In  almost 
every  large  city  these  grants  exceed  in  value  the 
amount  of  the  city  debt. 

Unfortunately  there  is  no  means  of  ascertaining 
the  amount  of  this  social  wealth,  this  land  value 
which,  by  every  principle  of  justice,  belongs  to  us  all. 
Yet  it  should  be  the  first  concern  of  the  govern- 
ment to  ascertain  its  amount.  For  if  it  be  the  first 
obligation  of  society  to  protect  the  property  which 
has  been  produced  by  the  individual,  it  is  surely 
an  obligation  scarcely  less  sacred  to  ascertain  and 
make  known  the  wealth  which  is  the  common 
property  of  us  all. 

It  is,  however,  possible  to  estimate  this  unearned 
increment,  which  the  laws  of  society  permit  to  be 
appropriated  by  those  who  own  the  land.  In  1904 
an  investigation  was  made  by  the  Census  Bureau 
of  '^Wealth,  Debt,  and  Taxation"  in  the  United 


THE  UNEARNED  INCREMENT     135 

States.  From  this  report  it  appears  that  the  value 
of  the  land  with  its  improvements,  as  well  as  of  the 
railways  and  the  franchise  corporations,  amounted 
to  $71,195,626,966.^  Unfortunately  no  distinction 
is  made  as  to  pure  land  values  and  improvement 
values.  But  from  other  and  independent  investi- 
gations, from  the  tax  valuations  of  cities  where 
land  and  improvements  are  separately  valued,  it  is 
safe  to  say  that  the  land  values  are  fifty  per  cent, 
of  the  total.  On  this  basi-s  the  pure  land  values  of 
the  country  amount  to  not  less  than  $35,000,000,- 
000.  They  undoubtedly  exceed  this  amount.  Mr. 
John  Moody  estimates  them  at  $60,000,000,000.' 

No  other  forms  of  wealth,  save  the  land  and  the 
privileges  identified  with  land,  respond  in  this  way 
to  the  growth  of  population.  Society  works  for  the 
owner  of  the  land  and  him  alone.  Every  other 
form  of  wealth  is  produced  by  individual  labor. 
Every  other  form  of  wealth  depreciates  and  decays. 
It  has  but  a  transitory  existence.  Much  of  it  does 
not  survive  the  year  which  saw  it  produced.  Such 
wealth  involves  constant  care  and  attention.  But 
each  tick  of  the  pendulum  of  time  passes  into  the 
purse  of  those  who  own  the  land  the  power  to  take 
from  those  who  toil  an  increasing  portion  of  that 
which  their  labor  produces. 

'.United  States  Census,  "Wealth,  Debt,  and  Taxation,"  p.  27. 
2 "The  Evolution  of  the  Trust,"  The  Arena,  May,  1907.     For  a 
fuller  discussion  of  land  values  in  America  see  Appendix  No.  1. 


136  PRIVILEGE  AND  DEMOCRACY 

Land  values  are  not  really  wealth  at  all,  although 
the  increase  which  has  taken  place  in  recent  years 
has  been  heralded  as  a  sign  of  increasing  prosperity. 
And  such  it  is  to  those  who  enjoy  the  increasing 
rents  which  land  values  make  possible.  But  wealth 
is  something  which  ministers  to  the  comfort,  hap- 
piness, and  well-being  of  humanity.  Houses  are 
wealth;  food,  clothing,  machinery,  tools,  and  works 
of  art  and  refinement  are  wealth.  All  of  the  prod- 
ucts which  labor  creates  are  wealth.  But  land 
values  are  a  tax  on  wealth.  Rent  is  in  the  nat- 
ure of  a  tax.  It  is  far  worse  than  a  tax.  So- 
ciety receives  some  return  from  its  taxes.  It  re- 
ceives none  whatever  from  the  payment  of  rent. 
Rent  is  a  tribute  from  labor  to  those  who  give  no 
service  in  return. 

In  his  Essays  in  Political  Economy,  Frederic 
Bastiat,  the  French  economist,  tells  the  story  of 
the  gratification  of  the  crowd  which  had  collected 
before  a  broken  shop  window. 

''It  will  make  more  work  for  the  glazier,"  said 
one  of  the  crowd.  ''It  is  a  good  thing  for  property 
to  be  destroyed,  otherwise  no  one  would  give  us 
employment. " 

This  is  the  result  that  was  seen.  The  unseen 
thing  was  that  the  shopkeeper  would  have  to  go 
without  a  needed  pair  of  shoes.  He  would  have 
to  make  some  sacrifice  in  order  to  pay  for  the  loss. 
The  making  of  the  shoes  would  also  have  provided 


THE  UNEARNED  INCREMENT     137 

work,  but  work  which  would  have  added  to  the 
wealth  of  society.  This  is  the  result  that  was 
unseen. 

So  it  is  with  the  growth  of  land  values.  Those 
who  measure  the  well-being  of  a  nation  through 
the  increase  in  the  value  of  the  land  and  the  in- 
flated capitalization  of  the  mines,  the  railways,  and 
the  franchise  corporations,  see  in  these  vaulting 
figures  an  increase  in  the  wealth  of  the  people. 
But  the  effect  that  is  not  seen,  like  the  cost  of  the 
broken  pane  of  glass  to  the  shopkeeper,  appears 
in  the  increasing  cost  of  living  to  those  who  bear 
the  burdens  which  these  increasing  values  involve. 
Their  standard  of  living  is  reduced.  The  demand 
for  the  products  of  labor  is  diminished.  The  out- 
put of  the  factory  is  curtailed.  It  is  this  increasing 
rent  charge  which  reduces  the  amount  of  wealth 
which  can  be  consumed.  In  time  the  industry  of  a 
country  will  be  greatly  impaired  through  the  ap- 
propriation by  rent  of  a  great  part  of  what  the  na- 
tion produces.  For  the  well-being  of  a  nation,  in 
the  last  analysis,  depends  far  less  on  the  amount  of 
wealth  that  is  produced  than  on  the  way  it  is  dis- 
tributed. 


CHAPTER  XII 
A  FEUDAL  SURVIVAL 

The  railway  question  is  at  bottom  a  land  ques- 
tion. The  railway  is  a  monopoly  because  of  its 
identity  with  the  land.  It  is  this  that  differen- 
tiates the  transportation  industry  from  other  busi- 
ness. The  right  of  way  of  a  railway  is  a  site  of  land 
long  drawn  out.  It  is  of  much  greater  value  than 
that  of  adjacent  farms  because  of  this  fact.  The 
particular  site  which  it  occupies  cannot  be  du- 
plicated. Terminals  in  the  cities  can  only  be  ob- 
tained at  a  prohibitive  cost.  In  many  instances 
the  only  available  routes  through  the  mountains 
are  already  occupied.  No  new  corporation  could 
raise  sufficient  capital  to  force  an  entrance  into 
New  York,  Philadelphia,  Chicago,  or  any  of  the 
other  large  cities  in  the  face  of  the  opposition  of  the 
existing  lines.  We  have  an  example  of  this  diffi- 
culty in  the  entrance  of  the  Gould  lines  into  Pitts- 
burg. The  Vanderbilt  system  owns  a  narrow  strip 
of  land  along  the  Mohawk  River,  which  is  almost 
the  only  available  railway  route  in  New  York 
state  between  the  Hudson  River  and  the  W^est. 
The  same  is  true  of  the  Pennsylvania  and  the  Bal- 
timore and  Ohio  systems  further  south.    Compe- 

138 


A  FEUDAL  SURVIVAL  139 

tition  is  only  possible  by  tunnelling  through  moun- 
tain ranges  and  the  appropriation  of  city  lands  of 
fabulous  value. 

It  is  their  identity  with  the  land  that  makes  the 
highways  of  the  nation  natural  monopolies.  It  is 
this  that  explains  the  ease  of  their  consolidation, 
the  watering  of  their  securities,  the  constant  growth 
of  earnings,  and  the  difficulty,  if  not  the  impossi- 
bility, of  regulation  by  the  nation  or  the  states. 

And  the  value  which  a  railway  enjoys  is  like  that 
of  the  land  underlying  a  city.  Its  earnings  increase 
with  the  growth  of  population  and  of  industry. 
Locomotives,  cars,  and  equipment  can  be  repro- 
duced indefinitely,  just  as  can  wagons,  carriages, 
or  automobiles.  In  these  things  there  can  be  no 
permanent  monopoly.  But  in  any  industry  affixed 
to  the  land,  like  a  railway,  a  franchise  corporation, 
or  a  mine,  monopoly  is  almost  inevitable.  For 
continued  competition  is  impossible. 

We  can  see  this  identity  of  the  railways  with  the 
land  in  the  growth  in  their  securities.  In  1906 
the  aggregate  outstanding  railway  securities  of  the 
country  were  $14,570,421,478,  of  which  $7,766,- 
661,385  was  in  the  form  of  bonded  indebtedness. 
According  to  the  United  States  Census  valuation, 
the  total  wealth  of  the  country  in  1904  was  $107,- 
104,000,000.  The  outstanding  securities  of  the 
railways  amounted  to  13.7  per  cent,  of  the  total. 
The  bonded  indebtedness  alone  amounts  to  $36,213 


140  PRIVILEGE  AND  DEMOCRACY 

per  mile.  This  is  more  than  the  known  average 
cost  of  construction  of  many  roads.  In  many  in- 
stances the  bonds  have  been  watered  as  well  as 
the  stock.  In  1898  the  total  railway  capital  was 
but  $10,818,554,031;  in  1900  it  had  increased  to 
$11,491,034,900,  in  1903  to  $13,213,124,679,  while 
in  1906  it  had  risen  to  $14,570,421,478. 

Capitalization  fast  outruns  the  growth  in  mileage. 
During  the  year  1905,  $600,000,000  of  new  securi- 
ties were  issued.  The  construction  in  that  year 
was  but  4,000  miles.  This  is  equivalent  to  $150,000 
a  mile,  probably  more  than  three  times  the  actual 
cost  of  the  increased  mileage.  According  to  the 
report  of  the  Industrial  Commission  $457,000,000 
of  securities  were  issued  in  1900,  of  which  not  more 
than  $120,000,000  could  be  assigned  to  new  con- 
struction. 

Wherever  population  is  densest  there  the  capi- 
talization is  highest.  The  Erie  Railway  carries  a 
capitalization  of  $300,000  per  mile.  The  Lake 
Shore  and  Michigan  Southern,  a  road  of  much  su- 
perior construction  and  equipment,  is  capitalized  at 
$100,000  per  mile.  The  total  capitalization  of  the 
Michigan  Central  Railroad  amounts  to  $402,000 
per  mile.  The  average  capitalization  for  the  en- 
tire country  is  $81,791  per  mile. 

The  watered  securities  of  the  railways  are  so- 
ciety's contributions  to  the  owners.  They  repre- 
sent no  increase  in  the  wealth  of  the  nation,  no 


A  FEUDAL  SURVIVAL  141 

great  intelligence  or  thrift  on  the  part  of  the  owners, 
no  addition  to  the  comfort  and  convenience  of  the 
people.  Increased  capitalization  where  no  real  in- 
vestment is  made  means  increased  orders  on  the 
labor  and  industry  of  the  future. 

It  is  possible  to  measure  the  exertions  of  society 
on  behalf  of  those  who  own  the  highways  in  the 
growth  of  their  earnings,  as  well  as  in  their  in- 
creasing capitalization.  In  1897  the  gross  earn- 
ings of  the  railways  amounted  to  $1,222,089,773. 
Ten  years  later  they  had  grown  to  $2,346,640,000. 
During  the  same  period  net  earnings  increased 
from  $369,565,009  to  $790,188,000,  a  gain  of  $420,- 
622,991.  During  these  years  railway  mileage  in- 
creased but  22.2  per  cent.,  while  the  gross  and  net 
earnings  increased  over  100  per  cent,  and  the  divi- 
dends over  200  per  cent. 

In  this,  as  in  many  other  respects,  the  nineteenth 
century  has  reproduced  the  institutions  of  earlier 
ages.  The  private  ownership  of  the  railways  is  an 
instance  of  political  atavism.  Along  the  banks  of 
the  upper  Rhine,  perched  upon  some  inaccessible 
crag  or  point  of  land,  may  still  be  seen  the  majestic 
ruins  of  castles  fast  passing  to  decay.  They  date 
from  a  period  when  the  only  authority  was  force, 
and  the  only  government  the  will  of  the  feudal 
overlord.  Throughout  lower  Germany  from  the 
Netherlands  to  the  Tyrol;  in  France,  in  Austria, 
in  Italy — in  fact  all  over  the  face  of  Europe,  these 


142  PRIVILEGE  AND  DEMOCRACY 

monuments  of  an  earlier  society  stand  out  grimly 
from  every  point  of  vantage,  suggestive  of  the  reign 
of  force  and  lawlessness  which  was  the  only  govern- 
ment in  continental  Europe  for  a  thousand  years. 
From  these  fastnesses  the  lords  of  the  surrounding 
territory  levied  tribute  upon  the  caravans  which 
passed  that  way.  They,  too,  did  it  as  a  matter 
of  right.  Did  they  not  own  the  highways?  They 
filled  their  castles  with  the  tapestries  and  the  luxu- 
ries of  the  Orient.  They  took  what  they  needed 
of  the  industries  of  Italy  and  Germany;  theirs  were 
the  best  of  wines  and  the  costliest  of  furnishings. 
Without  labor  they  maintained  themselves  and 
their  followers  through  the  labor  and  industry  of 
others.  This  tribute  was  exacted  no  more  arbi- 
trarily than  that  of  the  railways  of  to-day.  Then 
as  now  this  power  was  possible  through  the  owner- 
ship of  the  land,  by  means  of  which  the  highways 
of  the  country  were  controlled. 

The  railways  of  to-day  levy  tribute  upon  all 
trade.  They  collect  a  toll  upon  all  industry.  By 
reason  of  the  complexity  of  industrial  relations, 
the  railways  have  become  indispensable  to  our  life. 
They  are  the  arteries  of  commerce.  Were  they 
closed  by  some  calamity  of  nature,  the  entire  popu- 
lation of  our  cities  would  be  on  the  brink  of  starva- 
tion in  a  few  days'  time.  All  industry  would  come 
to  a  standstill.  To  this  extent  are  we  dependent 
upon  the  will  of  the  modern  barons  of  privilege  into 


A  FEUDAL  SURVIVAL  143 

whose  hands  we  have  intrusted  this  most  vital 
function  of  our  Hves.  Every  article  of  consump- 
tion is  subject  to  this  tribute;  a  tribute  which  is 
fixed  by  the  arbitrary  will  of  a  handful  of  men, 
just  as  was  the  toll  of  the  passing  traveller  of  the 
Middle  Ages  to  the  overlord  of  the  territory  through 
which  he  passed. 

The  identity  of  the  railway  with  the  land  not 
only  explains  the  increase  in  capitalization  and  the 
growth  in  earnings,  it  also  explains  the  ease  of 
their  consolidation.  The  railways  cannot  be  du- 
plicated. The  very  nature  of  the  railway  business 
makes  it  a  monopoly;  a  monopoly  which  has  rap- 
idly concentrated  into  a  very  few  hands. ^ 

'  Senate  Document  No.  278,  GOth  Congress,  1st  session,  1908,  on 
"  Interstate  Commerce  Corporations  Owning  Capital  Stock  of  Other 
Transportation  Companies, "  shows  the  extent  of  this  community  of 
control  and  interest  between  the  railways  of  the  country  as  well  as 
the  extent  to  which  this  control  is  lodged  in  the  banking  and  financial 
interests.  From  this  it  appears  that  fifty-one  persons  constitute  a 
majority  of  the  board  of  directors  of  the  great  railway  systems  of  the 
country,  comprising  53.29  per  cent,  of  miles  operated,  64.7  per  cent, 
of  the  gross  earnings,  71.69  per  cent,  of  the  ton  mile  of  freight 
carried,  and  66.12  per  cent,  of  the  commercial  value  of  operating 
property.  The  report  says:  "The  extent  of  the  centralization  of 
control  in  railway  administration  is  not  fully  disclosed  by  the  in- 
formation thus  far  presented.  Community  of  interest  and  unity  of 
direction  extend  beyond  the  contractual  or  proprietary  relations 
which  underlie  the  systems.  This  may  be  termed  the  control  of 
group  interests.  It  has  long  been  a  matter  of  common  knowledge 
that  in  many  cases  a  comparatively  small  number  of  men,  acting 
unitedly,  may,  through  their  ownerships  or  control  of  stocks  in  the 
controlling  corporations  of  two  or  more  systems,  unify  the  operations 
of  those  systems  in  such  a  wise  as  to  produce  as  harmonious  opera- 
tion as  could  be  had  if  all  the  elements  were  aggregated  into  a  single 


144  PRIVILEGE   AND  DEMOCRACY 

There  are  six  great  groups^  whose  mileage  and 
capitalization  includes  practically  all  of  the  greater 
transportation  agencies  of  the  country.  And  these 
groups  are  interrelated  by  the  closest  of  ties.  They 
are  banded  together  by  the  closest  of  business, 
personal,  and  financial  interests.^ 

system.  .  .  .  When  the  same  individuals  constitute  harmoniously 
acting  majorities  of  the  boards  of  directors  of  two  or  more  corpora- 
tions, it  seems  proper  to  say  that  the  control  of  the  particular  cor- 
porations whose  boards  are  thus  constituted  is  actually  imified. " — 
P.  109. 

It  further  appears  from  the  same  report  that  ninety-three  persons, 
acting  together,  would  be  able  to  control  more  than  75  per  cent,  of  the 
operated  mileage  of  the  country,  more  than  81  per  cent,  of  the  gross 
earnings,  more  than  87  per  cent,  of  the  tonnage,  and  more  than  82 
per  cent,  of  the  commercial  value  of  railway  operating  property. — 
P.  110. 

As  a  matter  of  fact,  if  the  individuals  who  nominally  appear  upon 
the  directorates  of  these  railways  were  still  further  reduced  to  the 
real  owners,  it  would  be  found  that  six  or  eight  financial  interests, 
the  Rockefeller,  Morgan,  Vanderbilt,  Harriman,  Gould,  Pennsylvania, 
Kuhn-Loeb,  Moore,  and  one  or  two  other  harmoniously  acting  finan- 
cial groups,  really  controlled  from  75  to  90  per  cent,  of  the  railway 
systems  of  America. 

>  By  1903  the  following  community  of  interest  had  come  to  prevail: 

Group  Mileage  Capitalization 

Vanderbilt  group 21,888  1,169,196,132 

Morgan 47,206  2,265,116,350 

Harriman,  Kuhn-Loeb     .     .     .  22,943  1,321,243,711 

Pennsylvania 19,300  1,822,402,235 

Gould,  Rockefeller      ....  28,157  1,368,877,540 

Moore 25,092  1,070,250,939 

164,586  9,017,086,407 

See  Moody's  Truth  About  the  Trusts,  p.  439. 

" "  The  financiers  who  are  at  the  head  of  an  entirely  administered 
railroad  trust  are  J.  Pierpont  Morgan,  John  D.  and  William  Rocke- 
feller, W.  K.  and  W.  F.  Vanderbilt,  George  J.  Gould,  A.  J.  Cassatt, 
James  J.  Hill,  Edward  Hawley,  H.  H.  Rogers,  August  Belmont, 
Thomas  F.  Ryan,  W.  H.  and  J.  H.  Moore.  .  .  .  The  superior  domi- 


A  FEUDAL  SURVIVAL  145 

This  narrowing  of  control  will  undoubtedly  con- 
tinue. Competition  is  already  at  an  end.  In  the 
hands  of  a  syndicate  of  stock  speculators  the  life 
and  industry  of  80,000,000  people  rests.  Through 
discrimination  and  rebates  they  have  crushed 
out  competition  in  the  oil  business;  they  have 
concentrated  the  ownership  of  the  anthracite  and 
bituminous  coal  in  their  own  hands;  they  have 
aided  in  the  monopolization  of  the  iron  and  the 
steel,  the  sugar  and  the  tobacco  monopolies.  The 
meat-packing  monopoly  has  been  fostered  by  car 
and  freight-rate  favors  until  it  is  invulnerable. 
Almost  every  one  of  the  universal  necessities  of 
life  has  been  monopolized  by  this  process,  or  its 
cost  increased  to  the  consumer.  For  the  power 
to  fix  railway  rates  is  the  power  to  destroy.  It 
is,  in  all  respects,  a  power  to  arbitrarily  tax.  The 
standard  of  living  of  the  consumer,  the  farmer, 
and  the  mechanic  lie  under  this  control.  The 
prices  of  wheat  and  of  corn,  of  beef  and  of  other 
foodstuffs  are  now  determined  in  the  markets  of 
the  world.  That  which  the  farmer  receives  is  fixed 
in  Liverpool.  The  returns  of  his  efforts  are  de- 
termined by  none  of  the  elements  which  control 
the  returns  of  the  manufacturer,  the  retail  dealer, 
or  the  professional  man.    They  are  fixed  by  the 

nating  influence  of  Mr.  Rockefeller  and  Mr.  Morgan  is  felt  in  greater 
or  less  degree  in  all  of  the  groups." — Moody's  Truth  About  the 
Trusts,  p.  442. 


146  PRIVILEGE  AND  DEMOCRACY 

competition  of  Russia  and  Argentina.  And  the 
railways  determine  what  portion  of  the  world-made 
price  the  farmer  shall  receive.  It  frequently  costs 
as  much  to  place  his  wheat  and  corn  at  the  seaport 
as  he  receives  for  it.  The  charges  of  the  railways, 
like  the  rent  of  the  landlord  in  Ireland,  is  fixed  by 
what  the  railway  managers  think  the  farmer  will 
bear.  Such  a  power  has  no  parallel  in  the  history 
of  mankind. 

The  railway  problem  is  far  more  serious  than  the 
evils  which  have  been  thus  far  attacked.  Legis- 
lation has  been  directed  against  discriminations 
and  rebates.  But  a  more  serious  evil  remains,  an 
evil  far  greater  than  that  at  which  the  legislation  of 
the  past  few  years  has  been  directed.  And  that  is  the 
evil  of  monopoly  charges  and  the  inevitable  conse- 
quence from  the  trusting  of  so  important  a  function 
to  private  hands.    This  is  an  evil  approved  by  law. 

We  have  some  means  of  knowing  what  the  rail- 
ways take  in  monopoly  profits.  That  is  shown  by 
their  dividends.  But  we  do  not  know  what  they 
destroy.  We  have  no  means  of  knowing  what  the 
productive  power  of  the  country  would  be  were 
the  transportation  agencies  adjusted  to  the  service 
of  the  nation  rather  than  to  the  service  of  the  spec- 
ulators of  Wall  Street.  We  cannot  tell  what  would 
be  the  effect  upon  the  farmer  and  the  manufacturer, 
the  jobber  and  the  worker  were  railway  management 
concerned  only  with  the  convenience  and  comfort 


A  FEUDAL  SURVIVAL  147 

of  the  community  rather  than  with  the  making  of 
dividends.  We  cannot  tell  what  the  gain  to  the  na- 
tion would  be  were  it  not  only  freed  from  freight  dis- 
criminations and  favors,  but  from  the  excessive 
charges,  and  the  desire  for  private  advantage,  which 
now  form  the  motives  in  the  administration  of  the 
highways  of  the  nation.  That  can  only  be  ascer- 
tained when  the  railways  become  in  fact,  as  they 
are  in  legal  theory,  public  carriers  operated  by  the 
government  for  the  service  of  the  community. 


CHAPTER  XIII 

"  FROM  HIM  THAT  HATH  NOT  SHALL  BE  TAKEN 
AWAY  EVEN  THAT  WHICH  HE  HATH" 

Just  as,  under  the  feudal  regime,  the  first-fruits 
of  the  field  were  taken  by  the  lord  of  the  manor 
as  a  tribute  of  his  lordship,  so  to-day  the  owners 
of  the  land  take  from  those  who  toil  a  tribute  in 
the  form  of  rent  as  an  evidence  of  the  same  servi- 
tude. Ground-rent  is  the  continuing  badge  of  feu- 
dal servitude;  a  servitude  which  has  come  down  to 
us  from  the  dark  ages  when  force  ruled  the  world. 
The  worker  of  to-day  differs  from  the  serf  of  the 
Middle  Ages  in  the  form  of  the  payment.  Rent 
is  the  money  equivalent  of  the  personal  services 
of  earlier  days.  But  despite  the  change  which 
has  taken  place  in  the  form  of  the  tribute,  the  mass 
of  the  people  are  still  subject  to  the  most  costly 
incidents  which  feudalism  involved. 

We  are  now  in  a  position  to  measure  the  tribute 
which  must  be  paid  to  those  who  own  the  land. 
That  which  we  can  see  runs  into  the  thousands  of 
millions  of  dollars  each  year.  It  exceeds  by  hun- 
dreds of  millions  all  of  the  taxes  paid  to  the  na- 
tion, the  states,  and  the  cities.  It  equals  the  com- 
bined labor  of  America's  16,000,000  men  at  three 

148 


"FROM  HIM  THAT  HATH  NOT"  149 

dollars  a  day  for  at  least  fifty  days  in  every  year. 
To-morrow  it  will  be  more  than  it  is  to-day.  Long 
before  another  generation  passes  it  will  be  more 
than  doubled.  For  agricultural  rent  is  just  begin- 
ning to  grow.  All  land  now  has  a  monopoly  value. 
The  rent  to  be  paid  must  rise  in  consequence,  for 
rent  is  fixed  by  the  demand  for  its  use. 

We  have  seen  that  the  value  of  the  land  under- 
lying the  city  of  New  York  is  $3,843,165,597.  The 
annual  rent  which  its  owners  receive  is  not  far 
from  $200,000,000.  And  this  mine  which  under- 
lies the  city  is  inexhaustible.  The  treasure  which 
is  taken  out  to-day  in  no  way  diminishes  the  treas- 
ure which  may  be  taken  out  to-morrow.  Only 
those  who  labor  are  the  poorer  because  of  its  pay- 
ment. They  are  carrying  an  annual  burden  greater 
than  the  total  interest  charge  on  the  national  debt 
at  the  close  of  the  Civil  War.  And  this  is  a  charge 
which  is  prior  to  all  others.  It  is  collected  far 
more  accurately  than  are  the  taxes  of  government. 
It  must  be  met  before  any  other  activity  is  possible. 
All  of  the  people  of  the  metropolis  and,  in  a  sense, 
all  of  the  people  of  America  are  subject  to  this 
money  tribute.  It  is  exacted  in  the  slum  as  it  is 
upon  the  avenue;  it  is  collected  from  the  office 
building  as  it  is  from  the  tenement.  It  is  a  burden 
upon  all  industry  as  it  is  upon  all  wages.  It  enters 
into  the  cost  of  every  commodity.  It  is  the  heav- 
iest charge  on  the  life  of  the  people.    Ground-rent 


150  PRIVILEGE  AND  DEMOCRACY 

is  the  largest  single  item  in  the  domestic  budget 
and  it  is  all  paid  by  labor. 

It  is  the  colossal  land  values  of  the  city  of  New 
York  that  drive  up  rents  on  the  East  Side;  it  is 
the  burden  of  rent  that  explains  the  60,463  annual 
evictions  in  the  borough  of  Manhattan,  and  the 
fact  that  one  in  every  ten  persons  who  die  in  New 
York  is  buried  at  public  expense  in  the  potter's 
field/  It  is  this  that  explains  the  thousands  of 
persons  who  nightly  wait  on  lower  Broadway  for 
a  crust  of  bread.  The  rent  charge  of  the  metrop- 
olis is  equivalent  to  a  per-capita  burden  of  over 
$50  per  annum  upon  every  man,  woman,  and  child 
in  the  city.  It  amounts  to  from  $200  to  $250  a 
family. 

The  wealth  with  which  the  ancient  estates  of 
England  are  being  rehabilitated  is  being  wrung 
from  the  sweated  labor  of  the  East  Side  of  New 
York.  It  is  the  labor  of  America  that  is  endow- 
ing colleges  and  universities  and  libraries.  It  is 
from  the  meagre  wages  of  the  most  destitute  of 
God's  creatures  that  the  privileged  classes  of  Eu- 
rope and  America  maintain  themselves  in  luxury. 
Everywhere  and  in  every  age  private  ownership 
of  the  land  means  aristocracy.  Everywhere,  too, 
it  means  poverty.  Everywhere  it  means  a  more 
relentless  struggle  for  existence,  and  a  constantly 

'  Poverty,  Robert  Hunter,  pp.  24  and  25.  The  number  of  evic- 
tions is  for  the  year  1903. 


"FROM  HIM  THAT  HATH  NOT"  151 

falling  standard  of  living  and  ultimate  national 
decay. 

To-day  all  America  and,  in  a  sense,  all  of  the 
world,  is  paying  tribute  to  the  baronial  owners  of 
the  land  which  underlies  the  Empire  City.  At 
a  thousand  dollars  a  year  a  man  must  work  ten 
full  centuries  to  earn  one  million  dollars.  Ten 
thousand  men  at  such  wages  must  work  half  a 
lifetime  to  pay  a  single  year's  rent  of  the  people  of 
New  York.  Two  hundred  thousand  men  from  the 
workers  of  the  metropolis  must  work  for  ten  long 
years,  ten  hours  a  day,  and  three  hundred  days 
every  year  to  pay  the  annual  incomes  of  the  few 
thousand  men  who  own  the  land  underlying  the 
city.  The  most  ruthless  Roman  governors  sent 
out  to  govern  her  subject  provinces  enjoyed  no 
such  colossal  tribute,  and  worked  no  greater  dev- 
astation upon  subject  peoples  than  that  which 
is  annually  inflicted  upon  the  free  citizenship  of 
America's  greatest  city.  No  wonder  the  vestibule 
of  the  new  world  presents  a  spectacle  of  degraded 
poverty  to  the  million  immigrants  who  annually 
crowd  to  America  to  escape  from  the  burden  of 
landlordism  in  foreign  lands. 

That  which  is  true  of  the  city  of  New  York  is 
true  wherever  mankind  has  come  together  in  great 
cities.  The  annual  increment  in  the  value  of  city 
land  has  created  and  is  creating  fortunes  whose 
colossal  proportions  so  far  exceed  the  needs  of  their 


152  PRIVILEGE  AND  DEMOCRACY 

owners  that  the  annual  excess  is  used  for  the  pur- 
chase of  still  greater  holdings/ 

But  rent  is  not  limited  to  the  agricultural  tenant 
or  the  slum  dweller.  It  is  paid  upon  the  iron,  the 
coal,  the  oil,  and  the  gas  sites  as  well.  Rent  is  the 
annual  value  which  arises  from  the  superior  ad- 
vantages which  one  piece  of  land  enjoys  over  an- 
other. It  may  be  a  corner  lot  on  Broadway,  a 
placer  mine  in  distant  Alaska,  a  lode  of  gold  or 
silver  10,000  feet  above  the  sea  in  the  Cripple 
Creek  regions.  It  may  be  a  great  deposit  of  Bes- 
semer ore  or  of  anthracite  coal.  The  values  which 
the  mineral  lands  enjoy  are  identical  with  the  land 

'  In  1900  the  value  of  the  land  in  the  city  of  Philadelphia  amounted 
to  $978,259,355.  (Bulletin  of  Bureau  of  Labor,  January,  1904,  p. 
106.)  At  five  per  cent,  per  annum,  this  is  equivalent  to  an  annual 
charge  of  $44,000,000.  It  is  a  burden  of  over  $200  upon  the  backs 
of  every  family  of  five  in  the  city.  In  fifteen  years'  time  the 
land  underlying  the  city  increased  in  value  by  $291,545,527,  or 
at  the  rate  of  $19,500,000  per  year.  The  value  of  the  bare  land 
in  the  city  of  Boston,  together  with  the  franchises  of  the  public 
service  corporations,  amounted  to  $842,600,000  in  1902.  For  five 
years  the  average  per  annum  increase  was  $21,753,000,  or  three  and 
three-quarters  million  dollars  more  than  the  annual  revenues  of  the 
city.  In  nineteen  years'  time  the  land  in  San  Francisco  increased 
$175,000,000  in  value,  or  $9,218,254  a  year.  This  was  nearly  four 
millions  a  year  more  than  the  total  taxes  of  the  city.  In  the  city 
of  Washington  the  minimum  increase  in  the  value  of  the  land  was 
$10,000,000  a  year,  or  $2,000,000  more  than  all  of  the  expenditure 
of  the  city.  If  the  naked  land  underlying  these  cities  is  worth  these 
sums,  it  is  because  human  labor  is  paying  rent  which  is  equivalent 
to  the  customary  rate  of  interest  on  capital.  City  by  city  the  ex- 
hibit is  the  same.  The  annual  increase  in  the  value  of  the  land 
alone  exceeds  all  of  the  expenditures  of  the  community.  The 
speculative  increase  in  values  might  all  be  taken  in  taxes  and  still  the 
owners  would  be  richer  each  year  than  they  were  the  year  before. 


"FROM  HIM  THAT  HATH  NOT"  153 

values  of  the  country  and  the  city.  They  spring 
from  no  labor  of  the  owner.  They  arise  from  no 
skill  of  man.  Only  the  necessities  of  humanity 
give  them  a  value,  a  value  which  increases  with 
every  social  activity.  And  the  value  which  they 
enjoy  is  a  mortgage  on  labor,  a  mortgage  as  scru- 
pulously collected  as  any  government  bond.  The 
capitalization  of  $800,000,000  placed  upon  the 
iron-ore  and  coal  lands  of  the  Steel  Corporation 
is  only  possible  because  of  the  profits  which  the 
trust  may  take  from  the  people  of  America  in  the 
form  of  rent.  The  franchises  of  the  public  service 
corporations  of  the  city  of  New  York  have  a  value 
in  the  market  of  many  hundreds  of  millions,  only 
because  of  the  exclusive  rights  which  they  enjoy 
upon  the  streets,  rights  which  enable  their  owners  to 
collect  from  the  labor  of  the  metropolis  from  forty 
to  fifty  million  dollars  a  year  in  excess  profits.  If 
the  anthracite  coal  monopoly  exacts  from  one  to 
two  hundred  million  dollars  a  year  from  its  con- 
sumers in  excess  of  the  reasonable  cost  of  producing 
70,000,000  tons  of  coal,  it  is  because  the  baronial 
owners  of  north-eastern  Pennsylvania  have  been 
able  to  enclose  one  of  the  most  precious  sites  on 
the  globe,  a  site  which  yields  them  a  rental  of  this 
amount  every  year.^    If  the  railways  of  the  coun- 

•  In  the  days  of  free  competition  anthracite  coal  sold  at  from 
$2.55  to  $3.00  a  ton  at  seaboard. — The  Anthracite  Coal  Industry, 
Roberts,  p.  74.    It  now  sells  for  twice  the  figure. 


154  PRIVILEGE  AND  DEMOCRACY 

try  are  capitalized  at  from  five  to  seven  billions 
more  than  their  reasonable  cost  of  construction,  it 
is  because  the  labor  of  the  nation  in  some  form  or 
other  is  paying  dividends  upon  that  sum. 

The  gross  earnings  of  the  railways  of  America 
have  doubled  in  ten  years'  time.  The  roads  need 
only  to  provide  the  service  for  a  need  already  ex- 
isting. And  the  tribute  which  they  collect  is  de- 
termined by  the  same  necessity  that  forces  up 
rents  in  the  tenement  districts  of  our  cities.  It  is 
fixed  by  what  humanity  will  bear.^ 

It  is  not  possible  to  know  the  value  of  the  mineral 
deposits,  of  the  coal  and  the  iron,  the  copper  and  the 
oil,  the  gas,  gold,  and  silver  mines  which  are  largely 
owned  by  the  same  syndicates  which  control  the 
railways  of  the  nation.  We  do  know  that  the  an- 
nual value  of  the  mineral  production  of  America 
amounted  to  $2,069,289,196  in  1907.==  Neither 
can  we  tell  the  amount  of  the  tribute  exacted  by 
the   street   railways   and   the  gas,   the   telephone, 

*  In  1906  the  gross  earnings  of  the  railways  of  the  country  were 
$2,346,000,000.  The  net  earnings  from  operation  were  $790,188,000. 
While  the  operating  expenses  increased  only  nine  per  cent,  for  the 
fiscal  year,  the  net  earnings  increased  over  fifteen  per  cent.  And  it 
is  probable  that  if  we  knew  all  of  the  ramifications  of  the  railway 
business,  all  of  the  connections  of  railway  directors  with  the  ex- 
press, the  fast-freight,  and  the  car  lines;  if  we  knew  all  of  the  hidden 
means  employed  by  these  sympathetic  agencies,  we  should  find  the 
tribute  imposed  upon  the  nation  by  the  owners  of  the  highways  in 
excess  of  a  fair  return  for  the  service  performed,  is  not  far  from  three- 
quarters  of  a  billion  dollars  a  year. 

2  The  United  States  Geological  Survey,  special  report,  1908. 


"FROM  HDI  THAT  HATH  NOT"    155 

electricity,  and  the  water  companies.  The  value 
of  the  franchise  corporations  of  the  country  is  esti- 
mated by  the  Census  Bureau  at  $4,840,000,000. 
It  is  probable  that  the  tribute  which  they  exact 
in  the  form  of  rent  for  the  sites  which  they  oc- 
cupy is  from  $200,000,000  to  $400,000,000  a  year; 
while  that  of  the  mine-owners  exceeds  the  latter 
sum. 

When  we  add  together  the  site  values  of  the  cities, 
the  unearned  values  of  agricultural  land,  the  fran- 
chise values  of  the  railways,  transportation,  trans- 
mission, and  public-service  corporations,  when  to 
this  is  added  the  social  value  of  all  of  the  mineral 
resources  of  the  nation,  we  have  a  grand  total  of 
social  values  of  from  forty  to  sixty  billion  dollars. 
We  cannot  tell  how  much  it  may  exceed  this  sum. 
But  from  the  investigations  of  the  census,  of  the 
Interstate  Commerce  Commission,  of  the  Geolog- 
ical Survey,  and  of  city  assessment  records,  we  know 
enough  to  be  sure  that  the  above  estimate  is  low. 
The  unearned  increment  probably  amounts  to 
$1,000  per  capita  for  every  man,  woman,  and  child 
in  the  country.  This  would  give  an  aggregate 
social  value  of  over  $80,000,000,000.  The  assessed 
value  of  the  land  and  the  franchises  alone  in  New 
York  City  amounts  to  $980,  and  in  Manhattan  bor- 
ough to  $1,376  per  capita.  In  Boston  the  assessed 
value  of  the  land  and  the  franchises  amounts  to 
$1,100  per  capita.    These  values  do  not  include 


156  PRIVILEGE  AND  DEMOCRACY 

the  railways  and  the  mineral  resources  of  the  coun- 
try, but  only  the  values  of  the  city  sites. 

Upon  this  colossal  sum  the  labor  of  America  is 
paying  rent  of  from  three  to  four  billion  dollars  a 
year.  It  amounts  to  from  forty  to  fifty  dollars 
per  capita,  and  from  two  hundred  to  two  hundred 
and  fifty  dollars  per  family.  It  is  collected  in  a 
thousand  different  ways.  It  enters  into  the  cost 
of  every  commodity.  It  reduces  the  standard  of 
living  of  all  classes.  And  this  tribute  is  all  paid 
by  labor;  not  by  labor  of  the  wage-earner  alone, 
but  by  the  labor  of  the  professional  man,  the  teacher, 
the  capitalist,  and  manufacturer.  Alike,  they  are 
all  despoiled  by  the  landlord.  For  rent  can  come 
from  no  other  source  than  labor.  From  out  the 
annual  income  of  the  nation,  the  landlord  is  the 
first  claimant  to  be  satisfied.  He  and  hunger  com- 
pete in  the  annual  division  of  the  product. 

It  is  the  labor  of  America  that  is  supporting  the 
idle  rich  in  the  capitals  of  the  world.  It  is  labor 
paid  in  the  medium  of  rent  upon  the  coal  and  the 
iron-ore  deposits  of  the  United  States  Steel  Corpora- 
tion that  enables  the  cities  of  America  to  be  dotted 
with  libraries,  just  as  it  is  the  rent  for  the  oil,  the 
copper,  and  the  gas  deposits  that  enables  Mr. 
Rockefeller  to  promote  philanthropy  and  endow 
great  universities. 

All  society  is  yoked  to  those  who  own  the  land, 
who  work  not  nor  spin.    It  is  not  necessary  that 


"FROM  HIM  THAT  HATH  NOT"         157 

they  should  work.  For  all  mankind  is  working 
for  them.  Nature  herself,  who  brings  forth  from 
each  of  its  kind,  labors  for  those  whose  income  is 
proportionate  to  the  resources  which  they  have  en- 
closed. Every  useful  activity  adds  in  some  way 
to  the  unearned  increment  of  the  land  which  is 
society's  own  product.  The  achievements  of  every 
walk  of  life  are  passed  on  and  on  until  they  finally 
lodge  with  those  who  have  filled  their  strong-boxes 
with  title-deeds  of  ownership  of  the  gifts  of  God  to 
all  his  creatures. 

While  poverty  is  explained  by  immigration,  by 
improvident  marriages,  by  the  Malthusian  law  of 
population,  by  the  drink  evil,  by  the  inequalities 
in  the  endowments  of  men,  the  real  cause  is  nearer 
at  hand.  It  is  to  be  found  in  the  burden  of  rent, 
which  is  slowly,  but  none  the  less  finally,  appropri- 
ating the  surplus  wealth  of  the  people. 

Among  the  mythological  traditions  of  the  ancient 
Greeks  is  the  story  of  a  wise  and  wealthy  king  whom 
the  gods  themselves  delighted  to  honor.  They  per- 
mitted him  to  dine  with  Zeus,  who  loaded  him  with 
distinctions  because  of  his  wisdom.  Yet  the  king 
presumed  upon  his  privileges  and  favors.  Not 
content  with  the  honors  which  he  enjoyed,  he  stole 
the  food  reserved  for  the  gods.  In  other  ways  he 
transgressed  the  privileges  of  mortals.  His  crimes 
finally  gave  such  offence  to  the  gods,  that  he  was 
condenmed  to  eternal  punishment  in  Tartarus,  a 


158  PRIVILEGE  AND  DEMOCRACY 

vast  and  gloomy  expanse  far  below  Hades  itself. 
Here  he  was  tortured  by  an  ever-burning  thirst. 
He  was  plunged  into  water  up  to  the  chin.  When 
he  sought  to  drink,  the  water  receded  from  his 
parched  lips.  He  was  consumed  with  hunger. 
Just  above  him  were  tall  trees;  their  spreading 
branches  laden  with  delicious  fruits  hung  tempt- 
ingly over  his  head.  But  no  sooner  did  he  raise 
himself  to  seize  them  than  a  wind  carried  them 
beyond  his  reach.  Thus  Tantalus  lived  within 
easy  reach  of  abundance  with  which  to  satisfy  his 
wants,  condemned,  by  his  own  unwisdom,  to  eternal 
hunger  and  thirst. 

Free  America,  rich,  wise,  and  endowed  with  re- 
sources more  ample  than  all  the  rest  of  the  earth, 
has  ventured  to  violate  the  experience  of  all  his- 
tory and  the  teachings  of  all  nature.  She  has 
abandoned  the  resources  with  which  she  was  en- 
dowed to  private  monopoly. 

Herein  is  the  paradox  of  civilization;  herein  is 
the  explanation  of  increasing  poverty  with  in- 
creasing wealth;  herein  is  the  law  of  civilization 
and  decay.  For  whatever  the  exertion  of  the 
worker,  whatever  the  gains  to  production,  they  in- 
evitably pass  to  those  who  own  the  soil.  In  time 
the  growth  of  population  will  lead  men  to  offer 
more  than  the  land  will  produce  for  its  use.  They 
will  offer  this  as  a  stay  of  execution,  just  as  a  con- 
demned criminal   seeks  a  reprieve  from  a  death 


"FROM  HIM  THAT  HATH  NOT"  159 

penalty  which  he  knows  to  be  inevitable.  For  the 
increase  in  rent  reduces  the  portion  retained  by 
labor,  until  it  becomes  less  than  life  itself  demands. 
Progressive  impoverishment  then  sets  in,  and  na- 
tional decay  results  in  national  ruin. 


CHAPTER  XIV 
SOME  OF  THE  COSTS  OF  LAND  MONOPOLY 

But  the  increasing  burden  of  rent  is  not  the 
only  sacrifice  which  the  private  ownership  of  the 
land  involves.  Private  land  ownership  is  to  the  pro- 
duction of  wealth  what  a  ball  and  chain  would  be 
to  a  runner,  or  a  kedge  anchor  to  a  racing  sloop. 
We  have  no  means  of  knowing  how  much  wealth 
would  be  produced  were  the  land  and  its  opportuni- 
ties unlocked  and  opened  up  to  labor. 

As  we  have  seen,  the  population  of  America  is 
but  28  to  the  square  mile.  This  includes  the  thirty 
odd  millions  who  dwell  in  cities.  The  people  of 
Germany  dwell  280  to  the  square  mile,  of  France 
188,  and  of  contented  Switzerland  218  to  the  mile. 
Were  America  peopled  as  snugly  as  are  these  Euro- 
pean countries,  our  population  would  range  from 
500,000,000  to  800,000,000  souls.  Nor  is  this  popu- 
lation of  ours  made  up  of  home-owners.  As  we 
have  seen,  35.3  per  cent,  of  the  farms  of  America 
are  worked  by  tenants,  while  only  54.9  per  cent, 
are  free  from  some  encumbrance  or  other.  At  the 
same  time  over  200,000,000  acres  are  in  the  hands 
of  less  than  50,000  persons,  the  average  size  of 
whose  holdings  is  4,237  acres.    This  is  one-fourth  of 

160 


THE  COSTS  OF  LAND  MONOPOLY        161 

the  total  cultivated  area  of  the  country.  It  exceeds 
the  combined  area  of  Great  Britain  and  France. 

These  plantation  estates  are  scattered  all  over 
the  West.  Some  of  them  exceed  a  million  acres  in 
extent,  and  many  of  them  exceed  a  hundred  thou- 
sand. They  are  held  for  speculation  or  grazing. 
Those  that  are  cultivated  at  all  are  worked  by 
hired  men.  These  workers  are  cheaper  than  the 
slaves  of  the  plantation-owners  of  the  South.  They 
come  to  the  employer  mature  and  able-bodied. 
They  involve  none  of  the  hazards  of  rearing  or 
purchase.  When  no  longer  efficient,  when  sick 
or  disabled,  others  are  there  to  take  their  place. 

It  is  land  monopoly  that  limits  the  population 
of  a  great  part  of  the  West  to  the  ''hands"  neces- 
sary to  cultivate  the  estates.  It  is  land  monopoly 
that  converts  great  prairie  stretches,  capable  of 
maintaining  millions  of  men  in  comfort,  to  the 
grazing  of  cattle.  It  is  this  that  encourages  the 
least  productive  forms  of  agriculture,  and  involves 
the  consequent  increase  in  the  cost  of  all  the  neces- 
sities of  life. 

That  which  is  true  of  a  great  part  of  the  West  is 
increasingly  true  of  other  sections  of  the  country  as 
well.  In  the  mountain  regions  of  the  Carolinas, 
of  Tennessee,  West  Virginia,  and  Kentucky,  in 
Florida  and  in  Virginia,  the  farmer  is  being  driven 
out  by  the  Northern  capitalist.  Men  whose  grand- 
fathers and  great-grandfathers  broke  through  from 


162  PRIVILEGE  AND  DEMOCRACY 

the  sea-coast,  in  the  seventeenth  and  eighteenth  cen- 
turies, are  selHng  their  holdings  at  an  insignificant 
price  to  speculators,  who  are  denuding  the  moun- 
tain-sides of  the  forests,  who  are  holding  great 
areas  out  of  use  because  of  the  mineral  resources 
deposited  in  them,  or  are  developing  them  as  private 
estates.  Men  who  now  work  these  forest  preserves, 
or  labor  in  the  mines,  were  once  their  owners. 
Where  formerly  there  was  industrial  freedom, 
now  there  is  industrial  servitude.  Others  have 
gone  to  the  towns,  where  they  quickly  dissipate 
the  insignificant  sums  received  for  their  holdings. 
In  the  mill  regions  of  the  South  one  finds  the  chil- 
dren of  these  small  farm-owners  at  work  in  the 
cotton  mills.  Many  of  them  not  yet  in  their  teens 
work  from  ten  to  fourteen  hours  a  day.  Here  they 
become  aged  before  their  time,  the  victims  of  dis- 
ease and  of  unsanitary  surroundings.  Here  they 
labor  in  great  numbers  from  early  morn  till  late 
at  night,  and  from  early  youth  to  the  grave,  in  the 
fetid  atmosphere  of  the  Southern  mill. 

It  is  very  generally  assumed  that  ownership  of 
the  land  is  necessary  to  efficient  production.  A 
little  reflection  will  show  that  this  is  not  true.  The 
right  to  own  the  product  has  nothing  whatever  to 
do  with  the  right  to  own  the  land.  Society  would 
not  hold  together  for  a  season  did  it  not  assure  to 
him  who  ploughed  the  ground  and  made  it  ready 
for  the  harvest  the  right  to  enter  on  the  fields  and 


THE  COSTS  OF  LAND  MONOPOLY       163 

gather  the  crops.  It  is  assurance  of  a  right  to  the 
product  that  stimulates  production,  a  stimulus  that 
is  wanting  to  an  increasing  percentage  of  agricult- 
ural workers  of  America  who  form  the  tenant 
class. 

Were  one  of  our  acquaintances  to  erect  a  pa- 
latial residence  in  the  heart  of  the  city;  were  he  to 
gather  together  from  every  quarter  of  the  world 
the  works  of  art  and  refinement;  were  he  to  fill  it 
with  the  most  costly  plate  and  the  most  beautiful 
Gobelin  tapestry;  were  he  to  line  its  walls  with 
marble  from  the  famous  quarries  of  Carrara,  and 
its  polished  floors  with  Persian  rugs;  were  he  to 
prepare  a  house  as  if  for  a  princess,  and  then  turn 
it  over  to  his  hounds  as  a  kennel,  a  commission 
of  lunacy  would  be  appointed  by  his  friends,  and 
the  control  of  his  property  would  be  taken  from 
him. 

Yet  America  has  done  far  worse  than  this.  En- 
dowed with  land  for  many  times  our  present  popu- 
lation, we  have  closed  that  opportunity  against 
ourselves.  We  are  repeating  the  most  colossal  mis- 
takes of  history.  Just  as  the  highlands  of  Scot- 
land, which  produced  the  hardiest  of  Great  Brit- 
ain's people,  have  been  cleared  of  humanity  to 
make  sheep  farms  and  hunting  preserves  for  the 
aristocracy,  so  a  large  part  of  America  has  been 
parcelled  out  into  great  plantations  owned  by  cor- 
porations and  individuals.    Speaking  of  the  ''clear- 


164  PRIVILEGE  AND  DEMOCRACY 

ances"  of   Scotland,    the  British  scientist,  Alfred 
Russel  Wallace,  says: 

''The  motive  for  these  clearances  is  usually  to 
obtain  a  larger  or  securer  rental  for  the  land,  either 
as  sheep  farms  or  as  deer  forests;  and  for  this  pur- 
pose tens  of  thousands  of  British  subjects  have 
been  driven  from  their  homes,  often  to  swell  the 
mass  of  indigence  and  crime  in  the  great  cities,  while 
the  country  is  being  denuded  of  a  hardy,  industrial, 
moral,  and  intelligent  population  to  which  our  army 
has  been  indebted  for  men  and  officers  who,  in  India 
and  elsewhere,  have  done  the  noblest  deeds,  and 
added  to  the  nation's  roll  of  fame.  Such  clearances 
are  a  deep  injury  to  the  state  and  a  positive  crime 
against  humanity,  of  the  same  nature  (though  less 
in  degree)  as  despotism  or  slavery.  Yet  they  are 
legal ;  and  no  power  exists  which  can  prevent  them, 
so  long  as  the  land,  without  which  no  man  could  live, 
is  allowed  to  be  monopolized  by  the  rich."  * 

That  which  is  true  of  Scotland  is  true  of  England 
and  Ireland  as  well.  By  means  of  the  enclosure 
acts  and  the  exemption  of  the  land  from  direct 
taxation,  by  means  of  settlements  and  entails,  the 
land  of  Great  Britain  is  more  closely  held  than  any- 
where else  in  the  world.  According  to  the  British 
Doomsday  Book  of  1875,  1,200  persons  own  one- 
quarter  of  the  soil  of  England,  Ireland,  Scotland, 
and  Wales.  The  average  size  of  these  estates  is 
16,200  acres.  Another  quarter  of  the  land  is  owned 
by  6,200  persons,   whose  holdings   average   3,150 

« Land  Nationalization,  p.  180. 


THE  COSTS  OF  LAND  MONOPOLY       165 

acres.  In  Scotland  the  land  is  even  more  closely 
owned.  A  single  owner  is  possessed  of  more  than 
a  million  and  a  quarter  acres.  Seventy  persons  own 
one-half  of  the  land,  and  1,700  nine-tenths  of  it. 
In  Ireland  the  conditions  are  the  same.  In  that 
unfortunate  land  two-thirds  of  the  soil  is  owned  by 
1,700  landlords.  Great  Britain  is  carved  up  into 
great  territorial  estates  like  those  of  France  under 
the  feudal  regime. 

A  great  part  of  the  land  is  used  for  hunting  pre- 
serves and  idle  pleasure.  Much  of  it  is  devoted 
to  the  grazing  of  cattle  and  indifferent  cultivation. 
But  an  insignificant  portion  is  cultivated  intensely, 
and  practically  all  of  it  is  worked  by  a  tenant  class. 
Less  than  one-fifth  of  the  population  is  engaged  in 
agriculture.  The  nation  is  face  to  face  with  the 
problem  of  poverty  produced  by  the  rack-rents  of 
country  and  city  and  the  exclusion  of  humanity 
from  the  land,  while  a  handful  of  landlords  enjoy 
rent-rolls  running  into  the  hundreds  of  millions  of 
dollars.  In  this  is  to  be  found  the  explanation  of 
Britain's  decay.  For  nearly  eight  millions  of  her 
people  live  on  the  border-land  of  starvation,  and 
fully  two-thirds  are  very  poor.  One  person  out 
of  seven  dies  in  a  public  hospital,  asylum,  or  work- 
house. In  the  cities  of  London  and  Liverpool  one 
person  in  every  four  dies  in  some  public  institu- 
tion. Nearly  fifty  per  cent,  of  the  army  candi- 
dates from  the  cities  are  rejected  as  physically  un- 


166  PRIVILEGE  AND  DEMOCRACY 

fit  for  service,  while  the  condition  of  the  peasant 
class  is  but  little  better. 

These  are  the  fruits  of  land  monopoly  in  Great 
Britain,  where  the  withholding  of  the  land  from 
use  and  the  competitive  rents  for  that  which  is 
used  have  reached  their  final  consequences.  They 
are  not  dissimilar  from  the  conditions  which  im- 
poverished Ireland  a  generation  ago. 

But  the  costs  of  land  speculation  are  not  con- 
fined to  the  agricultural  worker.  They  are  not 
limited  to  the  tenant  class  on  the  plantations  of 
the  West.  The  cost  of  monopoly  is  scarcely  less 
obvious  in  the  mineral  resources  as  well. 

In  the  upper  lake  regions  of  Minnesota,  Wiscon- 
sin, and  Michigan  are  to  be  found  the  most  mar- 
vellous iron-ore  deposits  in  the  civilized  world. 
Not  far  away  are  similar  deposits  of  copper.  All 
through  the  central  West  are  coal,  oil,  and  gas  ade- 
quate for  the  needs  of  generations.  Yet  the  amount 
of  iron,  the  amount  of  copper,  the  amount  of  coal, 
oil,  and  gas  that  humanity  may  use  is  determined 
by  those  who  have  appropriated  these  deposits. 
The  supply  is  doled  out  as  cupidity  or  greed  may 
determine.  The  resources  of  the  earth  are  closed 
to  labor  and  industry.  Humanity  is  warned  off  the 
land  in  order  that  the  prices  of  these  great  ne- 
cessities may  be  fixed  by  the  needs  of  life  itself. 

In  the  anthracite  fields  of  Pennsylvania  are  great 
areas  of  coal  lands  that  are  not  operated.    Upon 


THE  COSTS  OF  LAND  MONOPOLY       167 

this  supply  the  life  of  the  Eastern  seaboard  de- 
pends. Yet  it  is  surrounded  as  by  a  Chinese  wall. 
Labor  may  not  enter  and  no  fuel  may  go  forth  ex- 
cept on  the  terms  which  monopoly  dictates.  A 
generation  ago  competition  prevailed  in  these 
regions.  Then  the  output  of  coal  was  governed 
by  the  same  law  which  regulates  the  output  of 
wheat,  of  potatoes,  of  shoes,  of  clothes,  of  all  those 
commodities  which  are  governed  by  the  law  of 
competition.  Under  competitive  conditions  prices 
are  fixed  by  the  relative  amount  of  labor  which 
enters  into  each  commodity.  There  is  no  overpro- 
duction of  these  things.  Society  instinctively  pro- 
duces what  it  needs  with  something  like  divine 
foresight.  And  in  the  days  when  competition 
ruled  in  the  anthracite  coal-fields,  the  price  of  coal 
at  the  seaboard  ranged  from  $2.55  to  $2.60  a  ton. 
Twenty  years  ago  it  sold  for  $3.00  a  ton.^  To-day 
it  sells  for  approximately  $6.00  a  ton.  It  is  fixed 
by  the  railroad  syndicate  which  controls  the  region. 
A  generation  ago  there  were  more  than  a  hun- 
dred operators  in  this  field.  Each  operator  strove 
for  the  greatest  economy  in  production,  and  the 
best  market  for  his  output.  The  railways  and 
canals  were  eager  for  traffic.  They  sought  the  con- 
venience of  the  shipper.  The  operator  had  no  dif- 
ficulty in  securing  cars.  He  was  offered  compet- 
ing outlets  to  the  seaboard.    Finally  the  railroads 

'  The  Anthracite  Coal  Industry,  Roberts,  p.  74. 


168  PRIVILEGE  AND  DEMOCRACY 

entered  the  mining  business.  Then  they  discrim- 
inated against  the  independent  operator.  They 
refused  to  give  him  cars.  In  time  they  crushed  him 
out  and  acquired  control  of  his  property.  Com- 
petition was  ultimately  destroyed.  To-day  the 
coal  is  bottled  up  as  completely  as  were  the  Rus- 
sians at  Port  Arthur.  There  is  opportunity  here 
for  labor,  limited  only  by  the  needs  of  man.  But 
the  storehouse  of  nature  has  been  closed,  and  the 
railroads  carry  the  keys.  They  have  decreed  that 
only  a  limited  portion  of  the  capacity  shall  be 
worked.  Prices  are  maintained  by  charging  '^what 
the  traffic  will  bear,"  while  labor  is  excluded  from 
the  opportunity  of  employment.  By  this  process 
they  exact  from  the  life  and  industry  of  the  country 
at  least  $2.00  a  ton  more  than  was  paid  in  the  days 
of  free  competition. 

In  our  cities  the  cost  of  land  monopoly  is  equally 
manifest.  The  speculator  retards  development. 
He  strangles  the  city.  It  is  estimated  that  at  least 
one-half  of  the  area  of  every  large  city  is  inade- 
quately developed.  It  is  held  for  the  purposes  of 
speculation  or  covered  with  'Hax  earners."  A 
scarcity  value  is  created.  On  such  land  as  is  used 
rents  are  forced  up  in  consequence.  The  private 
dwelling  gives  place  to  the  apartment  house.  Where 
once  there  were  homes  now  there  are  tenements. 
City  land  values  have  become  prohibitive  to  the 
great  mass  of  people.     Only  a  diminishing  minor- 


THE  COSTS  OF  LAND  MONOPOLY       169 

ity  own  their  own  homes.  They  could  build  and 
would  build  were  it  not  for  the  initial  cost  of  the 
land.  Labor  is  thus  limited  in  its  opportunities, 
as  is  the  production  of  other  wealth. 

City  building  is  strangled  by  the  same  influences. 
Streets  are  cramped;  beauty  is  subordinated  to  the 
use  of  every  inch  of  soil.  Great  public  improve- 
ments are  rendered  impossible.  The  building  of 
schools  and  libraries,  the  opening  of  parks  and  play- 
grounds, the  development  of  docks,  the  making  of 
the  city  what  it  should  be,  are  throttled  by  the 
land  monopolist,  whose  dead  hand  makes  the  cost  of 
city  building  prohibitive. 

Everywhere  untouched  resources  in  abundance. 
Everywhere  land  inviting  labor  to  bring  forth 
wealth  for  our  use.  Close  beyond  the  walls  of  the 
city,  with  its  disease-breeding  slums  and  tenements, 
is  land  upon  which  homes  could  be  erected  did  its 
price  not  prohibit  its  purchase.  Mines,  forests, 
quarries,  and  resources  more  ample  than  those  of 
all  Europe,  are  kept  out  of  use  by  the  monopolist 
and  speculator.  Within  our  cities  are  strength, 
talent,  and  genius,  trained  by  a  system  of  universal 
education  and  eager  for  the  expression  of  their  life. 
So  eager  is  labor  for  a  chance,  and  so  limited  are  its 
opportunities  for  expression,  that  the  sweat-shops 
are  crowded  to  suffocation,  while  the  mining  regions 
swarm  with  men  fighting  for  a  chance  to  spend 
their  lives  underground.  At  the  same  time  millions 
of  men  are  constantly  out   of  employment,  while 


170  PRIVILEGE  AND  DEMOCRACY 

millions  more  are  on  the  dead-line  of  poverty. 
Between  labor  and  opportunity  the  land-owner 
has  drawn  a  dead-line  which  may  not  be  crossed. 

Were  a  syndicate  from  Wall  Street  to  gather 
together  all  of  the  bread  of  the  city  of  New  York; 
were  it  to  say  to  the  people  of  the  metropolis, 
*'You  may  have  so  much  food  as  we  daily  deter- 
mine, on  condition  that  you  labor  for  us  a  certain 
number  of  days  each  week, "  riots  would  ensue,  riots 
which  the  police  and  militia  could  not  check.  Yet 
such  is  the  notice  which  has  been  served  upon 
America.  For  land  is  as  essential  to  life  as  bread 
itself.    It  is  the  source  of  all  wealth. 

Charles  Stewart  Parnell  used  to  quote  with  ap- 
proval, in  explanation  of  the  misery  of  his  own 
unhappy  land,  the  following  words  of  Henry  George: 

"Man  is  a  land  animal.  A  land  animal  cannot  live 
without  land.  All  that  man  produces  comes  from 
the  land;  all  productive  labor,  in  the  final  analysis, 
consists  in  working  up  land  or  materials  drawn 
from  land  into  such  forms  as  fit  them  for  the  satis- 
faction of  human  wants  and  desires.  Man's  very 
body  is  drawn  from  the  land,  and  to  the  land  we 
must  return.  Take  away  from  man  all  that  belongs 
to  the  land,  and  what  have  you  but  a  disembodied 
spirit?  Therefore,  he  who  holds  the  land  on  which 
and  from  which  another  man  must  live  is  that 
man's  master,  and  the  man  is  his  slave.  The  man 
who  holds  the  land  on  which  I  must  live  can  com- 
mend me  to  life  or  to  death  just  as  absolutely  as 
though  I  were  his  chattel.  Talk  about  abolish- 
ing slavery — we  have  not  abolished  slavery;    we 


THE  COSTS  OF  LAND  MONOPOLY       171 

have  only  abolished  one  rude  form  of  it,  chattel 
slavery.  There  is  a  deeper  and  more  insidious 
form,  a  more  cursed  form  yet  before  us  to  abolish, 
in  this  industrial  slavery  that  makes  a  man  a  virt- 
ual slave,  while  taunting  him  and  mocking  him  in 
the  name  of  freedom." 

It  is  only  the  ingrained  usage  of  generations 
that  blinds  our  eyes  to  the  devastating  effects  of 
the  private  ownership  of  the  land.  It  is  far  more 
costly  than  the  tariff,  far  more  ruinous  than  dis- 
criminating freight  rates.  It  is  not  so  much  the 
burden  of  rent,  it  is  the  strangling  of  wealth 
production  that  makes  the  private  ownership  of 
the  land  so  costly.  It  affects  the  industrial  life 
of  a  people  like  an  invading  army.  It  is  not  the 
burden  of  its  maintenance  that  makes  it  so  costly, 
it  is  the  abandoned  fields,  the  deserted  workshops, 
the  confusion  to  all  trade  and  industry,  and  the 
blight  which  settles  on  the  country  which  makes  a 
defensive  war  so  exhausting.  It  is  not  the  amount 
destroyed,  it  is  the  wealth  that  is  never  pro- 
duced that  measures  the  cost.  At  the  close  of  the 
Franco-Prussian  war  an  indemnity  of  one  billion 
dollars  was  exacted  from  the  people  of  France. 
This  colossal  tribute  was  paid  with  comparative 
ease.  But  had  the  nation  been  devastated  by  an 
army  of  occupation,  had  the  mills  and  the  factories 
been  closed,  had  the  peasants  been  driven  from  the 
fields,  as  were  the  people  of  the  Southern  States  of 


172  PRIVILEGE  AND  DEMOCRACY 

America,  such  an  indemnity  would  have  been  out 
of  the  question.  It  could  not  have  been  paid  by 
a  prostrate  people. 

And  it  is  the  wealth  which  is  never  produced  by 
the  labor  which  is  never  employed,  or  is  badly  em- 
ployed, that  measures  the  loss  from  the  private 
ownership  of  the  land.  This  is  the  costliest  price 
of  all.  And  the  correction  of  this  injustice  has  en- 
gaged the  attention  of  almost  every  people,  from 
the  early  Hebrews  down  to  the  land  of  legislation 
of  Great  Britain  to-day.  In  some  form  or  other 
the  agrarian  question  is  uppermost  in  every  coun- 
try of  Europe,  but  it  is  only  in  far-off  New  Zealand 
and  New  South  Wales  that  a  democratic  solution 
is  being  tried,  a  solution  that  not  only  recognizes 
the  right  of  the  community  to  the  unearned  in- 
crement in  the  value  of  the  land,  but  strikes  at  the 
root  of  land  monopoly  by  forcing  the  owner  either 
to  use  that  which  he  holds  or  to  sell  it  to  some  one 
who  will.^ 

'  England  herself  is  following  in  the  footsteps  of  her  colonies.  The 
Liberal  budget  for  the  year  1909  was  avowedly  a  social  as  well  as  a 
fiscal  measure.  In  presenting  it  to  the  House  of  Commons  the 
Chancellor  of  the  Exchequer,  Lloyd  George,  said  that  its  purpose 
was  to  stimulate  the  vise  of  the  land  and  aid  in  the  breaking  up  or 
forcing  into  use  of  the  land  which  was  held  idle  in  the  kingdom. 
The  means  employed  was  the  taxation  of  undeveloped  land  on  its 
capital  value.  The  rate  of  taxation  imposed  was  not  high,  but  the 
promoters  of  the  measure  undoubtedly  contemplated  the  increase 
in  the  rate  as  soon  as  a  valuation  had  been  made  or  the  cities  and  local 
authorities  had  been  authorized  to  levy  a  local  rate  on  land  values. 
It  was  the  fear  of  this  that  influenced  the  House  of  Lords  to  reject 
the  measure. 


CHAPTER  XV 
THE  FUTURE  OF  LABOR 

From  now  on  the  struggle  for  existence  will  in- 
crease in  intensity.  From  now  on  the  cost  of  liv- 
ing will  be  more  exacting.  The  chance  for  a  decent 
human  existence  is  daily  narrowing.  The  number 
on  the  border-line  of  poverty  is  constantly  increasing. 
All  this  is  inevitable.  For  the  supply  of  land  is 
constant,  and  a  large  part  of  it  is  kept  out  of  use. 
The  demand  for  standing-room  is  increasing  with 
every  tick  of  the  pendulum  of  time. 

The  real  explanation  of  the  labor  problem  is  ob- 
scured by  the  appearance  of  things,  by  the  wages 
system,  and  the  struggles  of  capital  and  labor.  We 
do  not  see  through  the  industrial  question  into  the 
real  struggle  of  classes  which  lies  back  of  it  all. 
For  lack  of  employment,  hard  times,  the  wages 
question,  and  the  poverty  everywhere  appearing 
are  but  part  of  a  larger  problem,  a  problem  which 
can  only  be  cured  by  going  back  to  its  cause,  a 
cause  which  is  to  be  found  in  the  private  owner- 
ship of  the  land  and  the  resources  of  the  nation. 

This  being  true,  labor  can  no  more  improve  the 
general  standing  of  living  by  organization  than  a 
man  can  lift  himself  by  his  boot-straps.    Trades- 

173 


174  PRIVILEGE  AND  DEMOCRACY 

unionism  may  maintain  the  scale  of  wages  in  certain 
trades;  it  may  even  increase  nominal  wages  in  the 
highly  skilled  industries.  But  even  in  these  trades 
the  improvement  will  be  only  an  apparent  one.* 
For  the  increase  in  the  cost  of  living  will  more  than 
absorb  the  increase  in  nominal  wages.  No  array  of 
statistics  can  modify  this  tendency,  a  tendency 
which  has  been  very  manifest  during  the  past  few 
years.  But  the  investigations  of  public  and  pri- 
vate agencies  show  that  wages  have  not  been  ris- 
ing as  rapidly  as  has  the  cost  of  living.  It 
cost  fully  one-third  more  to  maintain  life  in  1905 
than  it  did  eight  years  before.  Wholesale  prices 
were  higher  in  1905  than  at  any  time  in  the  recent 
history  of  America.  It  required  $1.30  to  purchase 
as  much  in  that  year  as  was  attainable  for  $1.00 
in  1897.  It  is  estimated  that  during  the  ten  years 
prior  to  1907  the  cost  of  living  went  up  forty  per 
cent.,  while  the  wages  for  unskilled  labor  remained 
practically  stationary.  During  this  period  the 
wages  of  organized  labor  increased  but  seventeen 
per  cent.,  and  organized  labor  as  a  whole  does  not 
include  more  than  three  million  of  America's  work- 
ing population.^ 

•  As  a  matter  of  fact  even  nominal  wages  have  fallen.  The  Census 
Bulletin  on  Manufactures,  covering  thirty-three  states,  shows  that 
whereas  the  average  wage  in  1890  was  $418.48  a  year  or  $1.39  a  day, 
in  1900  the  average  wage  was  but  $397.53  a  year  or  $1.29  a  day. 

*  The  Bulletin  for  the  United  States  Bureau  of  Labor  for  March, 
1908,  presents  a  study  of  the  variations  in  the  wholesale  prices  of 


THE  FUTURE  OF  LABOR  175 

But  nominal  wages  form  only  one  factor  in  the 
equation  of  real  wages.  The  actual  income  of 
any  class  can  only  be  ascertained  by  the  amount  of 
goods  which  the  income  of  that  class  will  purchase. 
Wages  are  high  or  low,  according  to  the  comfort 
and  happiness  of  the  worker.  Nominal  wages  may 
be  very  high,  as  they  are  in  the  Yukon  or  in 
the  new  mining  camps  of  the  West,  but  if  every 
cent  that  is  received  is  expended  for  the  barest  ne- 
cessities of  life,  real  wages  are  very  low. 

It  is  the  unskilled  worker  who  is  suffering  most 
from  the  increasing  cost  of  living.  And  the  un- 
skilled laborer  comprises  at  least  two-thirds  of  the 
working  population.  He  does  not  organize.  His 
employment  is  precarious.  His  work  is  of  transi- 
tory nature.  There  is  no  cohesive  trade  sympathy 
to  keep  him  united  with  his  fellows.*  The  agri- 
cultural worker  falls  into  the  same  class.  He,  too, 
is  suffering  a  progressive  diminution  in  his  wages 
as  well  as  in  his  standard  of  living.  The  same  is 
true  of  the  salaried  and  professional  classes. 

From  now  on  the  cost  of  the  necessities  of  life 
must  continue  to  increase.    This  is  already  apparent 

258  representative  articles  from  1890  to  1907.  It  states  that  the 
average  price  of  all  articles  for  the  year  1907  was  44.4  per  cent  higher 
than  that  of  1897. 

•  The  Journal  of  Political  Economy  (June,  1905,  p.  359),  in  a  scien- 
tific analysis  of  the  wages  of  unskilled  labor  shows  that  "  the  wages 
of  common  laborers  remained  practically  unchanged  from  1890  to 
1900, "  while  the  increase  in  the  cost  of  living  has  materially  reduced 
their  real  wage. 


176  PRIVILEGE  AND  DEMOCRACY 

in  rent.  The  increase  in  the  tenement  districts  of 
New  York  has  been  so  rapid  as  to  lead  to  organized 
resistance.  The  cost  of  coal,  of  beef,  of  foodstuffs, 
of  cotton,  of  leather,  of  wool,  of  transportation,  of 
coal,  iron,  copper,  of  all  of  the  elemental  products 
which  come  directly  from  the  land,  has  been  going 
up  with  great  rapidity  during  the  past  few  years. 

This  increase  in  the  cost  of  living  is  due  to  mo- 
nopoly in  its  various  forms,  but  most  of  all  to  the 
monopoly  of  the  land  and  the  storehouse  of  nature.^ 
It  is  this  that  limits  labor  to  the  job  that  is  nearest 
at  hand;  it  is  this  that  herds  population  into  the 
cities;  it  is  this  that  closes  the  resources  of  nature 
to  humanity  and  strangles  the  production  of  wealth. 
While  men  and  women  are  suffering  from  cold  and 
hunger  all  over  the  land,  the  cotton-growers  are 
destroying  their  cotton  in  the  fields  of  the  South 
in  order  that  they  may  obtain  an  increased  price 
for  that  which  remains.  A  great  part  of  the  coal 
land  of  the  country  is  withheld  from  production 
in  order  that  a  scarcity  price  may  be  exacted  for 
that  which  is  used.  Hundreds  of  millions  of  fertile 
acres  are  kept  out  of  tillage  in  the  West,  and  to 
an  increasing  extent  in  the  East  as  well,  for  the 
purpose  of  speculation.  The  railways  in  many  in- 
stances fix  their  charges  at  the  point  which  will 
absorb  everything  that  the  farmer  produces  and  still 

•The  percentage  of  increase  in  rent  from  1897  to  1902,  as  ascer- 
tained by  the  Labor  Bureau  of  Massachusetts,  was  52.43  per  cent. 


THE  FUTURE  OF  LABOR  177 

keep  him  at  the  plough.  The  packing-houses  and 
warehouses  have  adopted  the  same  rule  of  charges. 
They  depress  the  price  of  raw  material  on  the  farm, 
and  by  a  similar  understanding  exact  all  that  the 
consumer  can  pay  at  the  other  end  of  the  line. 
The  sugar,  tobacco,  beef,  leather,  wool,  iron,  steel, 
oil,  and  copper  monopolies  screen  themselves  be- 
hind a  tariff  wall,  and  collect  such  tribute  as  their 
owners  see  fit  to  charge  through  their  alliance  with 
the  government  and  the  transportation  agencies 
of  the  nation.  It  is  these  influences  that  are  in- 
creasing the  cost  of  living  in  America.  And  so 
long  as  man  remains  a  land  animal  and  the  people 
permit  the  highways  to  be  privately  owned  and 
used  for  stock-gambling  purposes,  the  cost  of  living 
must  continue  to  increase. 

The  landlord  is  the  paymaster  of  all  other  classes. 
He  limits  the  opportunities  of  labor  and  profits  by 
every  babe  that  is  born.  For  the  growth  of  popu- 
lation is  increasing  the  demand  for  standing-room. 
It  raises  the  rent  which  must  be  paid  for  its  use  as 
well  as  the  cost  of  all  the  necessities  of  life.  So- 
ciety increases  the  value  of  the  land,  and  then  is 
charged  a  tribute  for  that  which  it  has  created. 

When  one  contemplates  the  methods  which  have 
been  pursued  in  the  abandonment  of  our  public 
lands,  it  seems  as  though  our  policy  had  been  in- 
spired by  the  employing  classes,  just  as  is  the 
immigration  of  cheap  labor  from  Europe.    For  had 


178  PRIVILEGE  AND  DEMOCRACY 

the  lands  been  opened  up  to  use  only  as  they 
were  actually  needed  by  settlers,  wages  would 
have  continued  to  rise  for  many  generations  to 
come,  while  homes  for  many  times  our  present 
population  would  have  been  available.  Then  the 
employer  would  have  been  forced  to  compete  with 
the  free  lands  of  the  West.  Under  these  condi- 
tions labor  would  have  continued  to  receive  some- 
thing like  the  full  value  of  its  services.  For  wages 
are  determined  by  the  existence  of  free  lands  and 
the  outlet  which  they  offer  to  increasing  population. 
When  such  an  alternative  exists  it  is  not  necessary 
for  men  to  shift  their  employment  to  agriculture 
in  order  to  secure  the  full  return  of  their  labor. 
The  very  existence  of  an  alternative  automatically 
keeps  wages  at  the  amount  or  somewhere  near 
the  amount  that  can  be  produced  on  the  free  land. 

But  the  enclosure  of  the  public  lands  has  de- 
stroyed this  alternative.  The  worker  is  reduced 
to  a  competitive  scale.  His  wages  are  determined 
by  the  hunger  of  those  outside  of  the  gates  of  the 
factory.  The  alternative  of  being  a  free  man, 
upon  a  farm  of  his  own,  is  now  gone  forever. 

That  free  land  is  the  determining  factor  in  fix- 
ing wages  has  been  recognized  by  at  least  one 
economist. 

''Free  land  being  given,"  says  Achille  Loria, 
''the  division  of  society  into  a  class  of  non-labor- 
ing capitalists,  and  a  class  of  non-capitalistic  la- 


THE  FUTURE  OF  LABOR  179 

borers,  is,  in  either  case,  out  of  the  question;  for, 
under  such  circumstances,  it  is  impossible  for  an 
idle  capitalist  to  acquire  any  profit. 

^'Colonial  countries  where  free  lands  abound 
offer  striking  illustrations  of  these  propositions,  and 
any  one  who  has  rightly  comprehended  the  devel- 
opment of  these  interesting  lands  must  recognize 
the  truth  of  our  assertions.  Note,  for  example,  in 
the  descriptions  of  the  early  days  of  the  United 
States,  how  this  fortunate  country  is  depicted  as 
inhabited  by  a  noble  race  of  independent  laborers, 
ignorant  of  the  bare  possibilities  of  capitalistic 
property;  read  Washington's  letters,  which  tell 
how  impossible  the  farmers  found  it  to  acquire 
any  income  whatever  from  their  lands  unless  they 
cultivated  them  along  with  their  laborers;  and 
mark  how  Parkinson,  Strickland,  and  other  Euro- 
peans who  travelled  in  America  during  the  eigh- 
teenth century,  were  one  and  all  struck  with  amaze- 
ment at  this  strange  land  where  money  did  not 
breed  money.  We  can  also  understand  why  the 
slave  system  of  the  ancient  world  and  the  serf- 
dom of  the  middle  ages  were  both  reintroduced 
into  our  modern  colonies;  for  it  was  only  by  re- 
sorting to  such  means  that  profits  could  be  acquired 
during  these  epochs  preceding  the  appropriation 
of  the  soil."' 

We  are  fearfully  afraid  of  names  and  phrases  in 
America.  We  resent  the  suggestion  of  '^industrial 
servitude."  Do  not  our  written  constitutions  de- 
clare that  ''there  shall  be  no  slavery  nor  involun- 
tary servitude"  within  the  commonwealth?  Are 
we  not  protected  by  manhood  suffrage  and  the 

'  Economic  Foundations  of  Society,  p.  3. 


180  PRIVILEGE  AND  DEMOCRACY 

guarantees  of  personal  freedom?  But  economic 
laws  recognize  no  bill  of  personal  rights,  and  eco- 
nomic servitude  is  no  more  incompatible  with  Magna 
Charta  and  the  Declaration  of  Independence  than 
it  is  with  the  despotism  of  the  czar.  We  can  en- 
slave ourselves  through  the  forms  of  democracy  as 
completely  as  we  may  be  enslaved  by  the  Sultan  of 
Turkey.  And  chattel  slavery  has  probably  disap- 
peared among  the  civilized  nations  as  much  through 
the  change  in  economic  conditions  as  through  the 
growing  humanity  of  man.  Cheap  labor  was  only 
possible  by  legalized  slavery  when  free  land  was  open 
to  all.  Then  the  slave  could  only  be  kept  in  subjec- 
tion by  positive  law.  But  as  soon  as  all  of  the  land 
had  been  taken  up,  the  necessity  as  well  as  the  econ- 
omy of  chattel  slavery  disappeared,  and  the  relation 
of  employer  and  employee,  of  landlord  and  tenant 
arose  to  take  its  place.  It  is  probable  that  the  labor 
cost  of  the  bonanza  farms  of  the  West  is  far  less  than 
the  labor  cost  on  the  plantations  of  the  South  prior  to 
the  Civil  War.  Free  labor  is  more  efficient  than 
slave  labor.  The  slave  must  be  reared  to  maturity. 
He  must  be  maintained  in  a  certain  degree  of  physi- 
cal efficiency.  He  must  be  cared  for  in  old  age. 
Slave  labor  is  notoriously  shiftless.  It  is  inspired 
neither  by  the  hope  of  reward  nor  the  fear  of  want. 
The  wage-earner,  on  the  other  hand,  comes  to  the 
employer  with  none  of  the  costs  of  rearing.  He  is 
impelled  by  the  hope  of  promotion  and  the  fear  of 


THE  FUTURE  OF  LABOR  181 

hunger,  and  his  place  may  be  filled  at  any  mioment 
by  an  advertisement  in  the  newspaper. 

It  must  be  evident  that  from  now  on  wages  will 
tend  to  the  margin  of  subsistence.  What  does  it 
cost  to  feed,  clothe,  and  keep  the  average  worker 
from  starvation?  That  is  the  measure  of  his  cost 
to  the  employer.  His  price  is  fixed,  just  as  is  the 
price  of  competitive  commodities,  by  the  cost  of 
production.  The  struggle  of  increasing  popula- 
tion against  diminishing  opportunity,  of  increasing 
consumption  against  decreasing  supply,  will  reduce 
wages  to  the  margin  of  subsistence,  just  as  the  in- 
come of  the  cottier  tenant  in  Ireland  was  reduced  to 
a  potato  diet  by  the  hunger  of  others,  eager  to  offer 
all  that  they  could  produce  for  the  mere  privilege 
of  having  a  place  upon  the  earth  whereon  to  work. 

We  can  see  this  process  already  at  work  wher- 
ever land  monopoly  is  most  complete.  It  is  evi- 
dent in  the  tenement  districts  of  our  cities,  where 
the  struggles  of  surplus  labor,  of  rack-renting,  and 
of  periodic  evictions  form  the  saddest  sights  of  the 
slums.  It  is  manifest  in  the  anthracite  and  bi- 
tuminous coal  regions,  where  the  miner  is  reduced 
to  a  bare  subsistence  wage,  and  is  kept  in  such  a 
state  of  dependence  by  the  operators  that  he  can- 
not even  protest  against  the  death-traps  wherein 
he  must  either  labor  or  starve. 

We  can  see  the  reduction  of  labor  to  a  subsist- 
ence wage  in  every  great  city.  There  every  material 


182  PRIVILEGE  AND  DEMOCRACY 

advance  expresses  itself.  There  men  and  women 
work  with  greatest  intensity,  while  labor-saving 
machinery  is  most  highly  developed.  There  labor 
is  most  minutely  divided.  In  the  cities  wealth  is 
produced  with  the  minimum  of  manual  labor. 
And  here  the  per  capita  production  is  greatest. 
There,  then,  we  should  expect  civilization  to  flower 
into  universal  well-being.  There  want  should  be 
confined  to  those  whom  illness  or  idleness  has  con- 
demned to  it.  Yet,  in  every  one  of  our  large  cities, 
at  least  one-quarter  of  the  people  are  hovering 
upon  the  border-line  of  want  or  are  actually  en- 
gulfed in  poverty.  Another  quarter  are  struggling  to 
maintain  an  existence  that  varies  from  that  of  com- 
fort to  one  that  is  far  from  enviable,  while  a  small 
group  are  enjoying  incomes  far  in  excess  of  all  hu- 
man needs. 

Wherever  the  monopoly  of  the  land  is  most  com- 
plete, there  the  fiercest  wars  of  labor  and  capital 
have  taken  place.  Labor  does  not  organize  in  a 
newly  discovered  mining  region,  for  every  worker  is 
a  prospector.  He  works  for  himself.  It  is  only 
when  monopoly  has  laid  its  hand  upon  the  region 
and  enclosed  the  opportunity  for  independent  min- 
ing, that  the  wages  system  comes  into  existence. 
In  the  early  days  of  California,  wages  were  fixed 
by  the  returns  of  the  independent  prospector.  No 
one  would  work  for  another  for  less  than  he  could 
produce  from  his  own  claim.    The  same  was  true 


THE  FUTURE  OF  LABOR  183 

in  the  early  days  of  the  Alaskan  gold-fields  and  the 
Tonemah  and  Goldfield  districts  in  Nevada.  The 
great  labor  wars  of  these  districts  followed  close 
upon  the  monopoly  of  the  regions.  So  long  as  op- 
portunity was  free  there  was  no  conflict,  for  the 
worker  could  change  his  hand  at  will. 

The  history  of  all  mining  regions  is  the  same. 
There  were  no  serious  strikes  in  the  anthracite  coal- 
fields so  long  as  competition  prevailed.  ''Before 
the  Civil  War  amicable  relations  prevailed  between 
the  co-operative  forces.  Then  in  the  majority  of 
collieries  employer  and  employes  lived  side  by 
side,  and  could  peaceably  adjust  their  differences. "  ^ 
But  where  formerly  there  was  peace,  now  there  is 
recurrent  industrial  warfare.  Not  only  warfare, 
but  the  most  complete  subjection  of  the  worker. 
Three-quarters  of  a  million  people  are  dependent 
upon  the  will  of  a  half-dozen  men  who  determine 
over  a  luncheon  whether  there  shall  be  work  or 
idleness,  as  to  what  those  who  labor  shall  receive 
in  wages,  and  when  their  labor  is  over,  what  they 
shall  pay  to  the  mine-owners  for  the  necessities  of 
life. 

Organized  labor  is  correct  in  its  diagnosis.  It  is 
correct  in  speaking  of  the  servitude  of  labor.  But 
servitude  is  not  confined  to  those  who  work  at  the 
bench  or  in  the  mill,  in  the  mine  or  in  the  factory. 
Servitude  is  a  condition  into  which  all  classes  are 

•  The  Anthracite  Coal  Indxistry,  Roberts,  p.  104. 


184  PRIVILEGE  AND  DEMOCRACY 

born,  in  every  nation  and  under  every  flag,  where 
the  right  to  use  the  earth  is  dependent  upon  the  will 
of  another.  And  the  servitude  has  been  the  same, 
whatever  the  form  of  the  tribute,  from  the  age  of 
serfdom  down  to  the  present  day.  And  it  rests 
upon  all  alike,  whether  they  work  with  their  hands 
or  their  brains,  whether  they  be  skilled  or  unskilled, 
whether  they  be  artisans,  artists,  professional  men, 
or  capitalists.  It  is  the  servitude  of  those  who 
labor  to  those  who  labor  not  at  all. 

And  the  results  which  follow  from  the  private 
ownership  of  the  land  are  as  immutable  as  the  laws 
of  nature  herself.  That  rent  is  the  great  absorb- 
ent, gathering  to  itself  an  increasing  portion  of  the 
wealth  which  is  produced,  is  so  obvious  a  fact  that 
it  should  be  the  fundamental  postulate  of  pohtical 
economy.  That  the  ultimate  consequence  of  this 
phenomenon  is  the  impoverishment  of  capital  as 
well  as  labor,  may  be  seen  on  every  hand.  That  it 
leads  to  an  ignorant  and  impoverished  peasantry 
on  the  one  hand,  and  an  idle  and  irresponsible 
aristocracy  on  the  other,  is  the  experience  of  all 
nations.  And  we  cannot  hope  to  escape  the  con- 
sequences of  these  laws  in  America  through  any 
declaration  of  political  freedom  any  more  than 
the  superstitious  savage  can  ward  off  disease  by 
incantation  and  sacrifice. 


CHAPTER  XVI 
THE  DISTRIBUTION  OF  WEALTH 

The  production  of  wealth  enlists  the  co-operation 
of  all  learning.  It  engages  the  best  thought  of  sci- 
ence. It  is  promoted  by  every  agency  of  govern- 
ment. We  know  to  a  fraction  the  cost  of  every 
commodity  and  the  annual  value  of  our  output. 
The  increase  in  the  production  of  wealth  is  heralded 
to  the  world,  as  is  every  invention  which  stimu- 
lates the  efficiency  of  labor.  Yet  we  know  prac- 
tically nothing  of  the  laws  which  govern  the  dis- 
tribution of  wealth.  The  university  is  silent  on 
the  subject.  It  remains  almost  unexplored  by  the 
political  economist.  The  splendid  foundations  for 
the  promotion  of  scientific  research  neglect  this, 
the  most  important  concern  of  man,  for  the  study 
of  the  earthworm  and  the  oyster. 

We  have  sadly  inverted  the  importance  of  things. 
It  is  of  comparatively  little  advantage  to  society 
that  one  man  can  produce  a  hundred  pairs  of  shoes 
where  but  a  single  pair  was  produced  a  generation 
ago,  if  his  labor  still  gives  him  but  a  single  pair  of 
shoes.  It  is  of  small  profit  to  humanity  that  the 
annual  production  of  wealth  now  amounts  to 
$1,170.20  per  family,  if  an  increasing  percentage 

185 


186  PRIVILEGE  AND  DEMOCRACY 

of  the  population  still  receive  but  the  barest  neces- 
sities of  life.  The  many  aids  of  the  government 
are  an  empty  service  to  the  farmer,  no  less  than 
to  the  consumer,  if  the  improvements  in  agricult- 
ure are  all  absorbed  by  the  railways,  the  ware- 
houses, and  packing  establishments,  just  as  it  is 
an  empty  service  to  the  wage-earner  to  be  trained 
to  perfection  in  technical  schools,  if  the  result  of 
his  training  is  all  appropriated  by  another. 

There  must  be  an  answer  to  the  question  of  why 
the  few  receive  more  than  they  can  possibly  earn, 
while  the  millions  receive  less  than  they  absolutely 
need;  why  it  is  possible  for  an  Astor,  a  Rockefeller, 
a  Carnegie,  or  a  Morgan  to  pile  up  wealth  which 
runs  into  the  hundreds  of  millions,  while  other 
men  of  equal  talent  and  industry  produce  no  more 
than  a  living,  while  millions  never  rise  above  the 
fear  of  sickness,  a  period  of  industrial  depression, 
or  some  calamity  which  temporarily  disables  the 
producing  member  of  the  family. 

The  explanation  of  this  mystery  has  been  sug- 
gested in  the  preceding  pages.  Those  who  have 
followed  the  tendencies  there  described  have  seen 
emerging  an  explanation  so  obvious  and  so  simple 
that  it  should  have  become  the  commonplace  of 
political  economy.  We  have  seen  how  the  Ameri- 
can continent  has  been  peopled  by  successive  gen- 
erations of  pioneers  spreading  out  from  the  At- 
lantic seaboard  in  concentric  circles  to  the  West; 


THE  DISTRIBUTION  OF  WEALTH        187 

how  decade  by  decade  the  outer  hne  of  popula- 
tion has  moved  steadily  toward  the  Pacific  Ocean, 
leaving  farms,  towns,  and  industry  in  its  rear.  We 
have  seen  how  the  free  land  has  been  all  enclosed, 
how  tenancy  has  appeared  along  with  land  mo- 
nopoly, how  all  of  the  resources  of  the  nation  have 
been  appropriated,  and  the  highways  have  been 
massed  under  the  control  of  a  constantly  narrow- 
ing syndicate  able  at  will  to  fix  the  terms  on  which 
the  industrial  life  of  the  nation  will  circulate. 

We  have  seen,  too,  how  land  began  to  have  an 
increasing  value  due  to  the  pressure  of  population. 
It  was  higher  at  the  seaboard  than  it  was  in  the 
interior.  It  was  more  valuable  in  the  towns  than 
it  was  in  the  country.  Some  of  it  is  more  pre- 
cious than  the  silver  dollars  which  will  cover  its 
surface.  Some  of  it  may  still  be  had  for  a  song. 
It  ranges  in  value  from  the  million-dollar  lot  in 
the  centre  of  a  great  city  to  the  semi-arid  wastes 
which  scarcely  support  life.  Everywhere,  however, 
the  value  of  the  land  reflects  the  density  of  popula- 
tion, the  improvements  in  the  means  of  production, 
and  the  necessities  of  the  people.  Everywhere  the 
value  is  social.  It  is  not  due  to  any  service  rendered 
hy  the  owner. 

Some  land  still  has  no  value.  It  will  produce  no 
more  than  a  living  for  him  who  works  upon  it. 
This  land  is  the  ''no  rent"  land,  the  land  of 
"marginal  fertility."    It  produces  no   surplus,   it 


188  PRIVILEGE  AND  DEMOCRACY 

yields  no  rent.  But  while  this  land  of  ''marginal 
fertility"  has  no  market  value  and  yields  no  rent 
itself,  it  fixes  the  value  and  rent  of  all  other  land. 
For  everything  that  other  land,  whether  it  he  a  city 
site,  a  bonanza  mine,  a  market  garden,  or  a  country 
farm,  produces  in  excess  of  the  return  from  the  land 
of  ^^  marginal  fertility,  ^^  the  land  which  will  just  sup- 
port the  worker  at  the  prevailing  standard  of  living,  is 
rent ;  it  is  the  annual  value  of  the  unearned  incre- 
ment which  society  has  produced. 

We  have  seen  how  the  land  of  America  is  now 
appropriated.  It  is  constantly  increasing  in  value. 
And  this  value  never  recedes.  The  present  popu- 
lation, the  number  of  children  that  are  born,  the 
number  of  immigrants  admitted  to  our  shores, 
this  it  is  that  determines  the  price  which  shall  be 
paid  for  the  privilege  of  being  upon  the  earth. 
This  measures  the  demand.  It  is  daily  and  hourly, 
by  night  as  well  as  by  day,  increasing  in  intensity. 
The  supply  of  land,  however,  is  constant.  It  is 
fixed  irrevocably.  No  effort  of  man  can  enlarge 
it.  The  only  element  that  is  variable  is  the  de- 
mand. And  the  demand  is  indicated  by  the  census 
returns. 

Rent  is  the  resultant  of  the  struggle.  It  may 
be  paid  in  personal  services,  in  the  shares  of  the 
farm  tenant,  or  in  cash.  It  may  be  paid  in  mining 
royalties  or  dividends,  in  the  charges  of  the  rail- 
ways  or   franchise    corporations.    In   a   thousand 


THE  DISTRIBUTION  OF  WEALTH        189 

unseen  forms  rent  is  collected.  It  is  a  toll  upon 
every  act  of  our  lives.  And  rent,  like  land  value, 
is  a  social  product.  It  is  a  common  treasure. 
Political  economists  have  obscured  the  nature  of 
rent  by  phraseology.  Ricardo  defines  rent  as  'Hhat 
portion  of  the  produce  of  the  earth  which  is  paid 
to  the  landlord  for  the  use  of  the  original  and 
indestructible  powers  of  the  soil."*  John  Stuart 
Mill  says:  ''The  rent,  therefore,  which  any  land  will 
yield,  is  the  excess  of  its  produce,  beyond  what  would 
be  returned  to  the  same  capital  if  employed  on  the 
worst  land  in  cultivation."  ^ 

All  of  the  economists  agree  in  this:  rent  has 
nothing  to  do  with  the  character,  thrift,  or  intelli- 
gence of  the  owner  of  the  land.  There  is  no  service 
rendered  by  him  in  return.  The  owner  may  live  in 
some  distant  corner  of  the  earth,  as  do  some  members 
of  the  Astor  family.  Rent  is  paid  for  the  mere 
privilege  of  living  upon  the  earth,  for  the  right  of 
using  one's  labor  upon  God's  common  heritage. 

Some  economists  have  seen  further  than  this. 
They  have  seen  that  rent  is  not  a  constant  charge. 
In  all  progressive  communities  it  continually  rises 
in  amount.  In  time  men  offer  all  that  the  land 
will  yield  in  excess  of  a  mere  living  for  the  privi- 
lege of  its  use.  Necessity  then  fixes  the  tribute. 
The  love  of  life  holds  the  scales  in  determining  its 

'  Principles  of  Political  Economy  ami  Taxation,  chap.  2,  p.  34. 
"^Principles  of  Political  Economy,  book  II,  chap.  3. 


190  PRIVILEGE  AND  DEMOCRACY 

amount.  This  is  what  happened  in  Ireland.  This 
is  what  is  taking  place  in  Great  Britain  to-day. 
This  is  the  ultimate  and  the  inevitable  result  of 
the  private  ownership  of  the  land. 

This  tendency  was  recognized  by  Ricardo,  who 
said:  'The  whole  surplus  product  of  the  soil,  after 
deducting  from  it  only  such  moderate  profits  as  are 
sufficient  to  encourage  accumulation,  must  finally 
rest  with  the  landlord. "  ^ 

This  fact  was  later  emphasized  by  Professor 
Cairnes,  who  wrote:  "A  given  exertion  of  capital 
and  labor  will  now  produce  in  a  great  many  direc- 
tions five,  ten,  or  twenty  times — in  some  instances, 
perhaps,  a  hundred  times — the  result  which  an 
equal  exertion  would  have  produced  an  hundred 
years  ago;  yet  the  rate  of  wages  has  certainly  not 
advanced  in  anything  like  a  corresponding  degree, 
whilst  it  may  be  doubted  if  the  rate  of  profit  has 
advanced  at  all.  Some  one,  no  doubt,  has  bene- 
fited by  the  enlarged  power  of  man  over  material 
nature;  the  world  is,  without  question,  the  richer 
for  it.  The  large  addition  to  the  wealth  of  the  coun- 
try has  gone  neither  to  profit  nor  to  wages  nor  yet  to 
the  public  at  large,  hut  to  swell  a  fund  ever  growing, 
even  while  its  proprietors  sleep — the  rent-rolls  of  the 
owners  of  the  soil.^'  ^    John  Stuart  Mill  expressed  the 

•  Principles  of  Political  Economy,  chap.  24,  p.  202. 
^Some  Leading  Questions  of  Political  Economy  Newly  Expounded, 
pp.  275-279. 


THE  DISTRIBUTION  OF  WEALTH         191 

same  thought.  "The  ordinary  progress  of  a  so- 
ciety," he  says,  ''which  increases  in  wealth  is,  at 
all  times,  tending  to  augment  the  incomes  of  land- 
lords; to  give  them  both  a  greater  amount  and  a 
greater  proportion  of  the  wealth  of  a  community, 
independently  of  any  trouble  or  outlay  incurred  by 
themselves.  They  grow  richer,  as  it  were,  in  their 
sleep,  without  working,  risking,  or  economizing. 
What  claim  have  they  on  the  general  principle  of 
social  justice  to  this  accession  of  riches?"  ^ 

I  admit  that  it  is  impossible  to  demonstrate  that 
the  wealth  of  the  world  is  being  appropriated  by 
those  who  own  the  land.  Neither  can  the  land 
question  be  visualized  as  can  the  capitalistic  sys- 
tem. But  a  common  knowledge  is  conclusive  that 
only  the  landed  classes  are  conspicuously  rich. 
This  is  true  in  every  country.  An  enumeration  of 
the  millionaires  in  any  city  finds  no  retail  and  only 
rarely  a  wholesale  dealer  among  them.  There  are 
comparatively  few  merchant  princes.  Here  and 
there  a  wealthy  manufacturer  may  be  found,  but 
his  fortune  is  usually  traceable  to  some  patent 
right,  or  the  identity  of  his  business  with  some 
landed  interest,  tariff  privilege,  or  railway  rebate. 
Competitive  business  produces  few  millionaires  in 
this  or  any  other  country.  And  they  suffer  con- 
stant reverses.  Their  fortunes  rarely  outlive  the 
generation  which  inherits  them.    The  conspicuous 

>  Principles  of  Political  Economy,  book  V,  chap.  1. 


192  PRIVILEGE  AND  DEMOCRACY 

wealth  of  America  is  landed.  It  springs  from  city 
sites,  from  mines,  railways,  transportation,  and 
franchise  holdings.  It  is  social  in  its  origin,  not 
competitive.  It  is  permanent  and  increases  more 
rapidly  than  the  powers  of  spendthrift  children  to 
dissipate  it.  Take  the  long  list  of  millionaires  of  the 
blue-book  of  Wall  Street  or  of  any  great  city;  almost 
without  exception  their  fortunes  are  the  creation 
of  society.  They  are  identified  with  some  landed 
privilege.  They  represent  no  labor  of  their  owners. 
And  they  are  all  identified  with  the  land.  From 
out  the  coal  and  the  oil,  the  natural-gas  and  the 
copper,  the  gold  and  the  silver  mines  scores  of 
other  fortunes  have  been  created,  fortunes  which  are 
increasing  in  value  with  each  passing  year  through 
the  necessities  of  humanity. 

Great  Britain  is  a  conspicuous  example  of  the 
same  fact.  Her  aristocracy  is  a  landed  one.  Trade 
and  commerce  have  enriched  the  country,  but  there, 
as  here,  the  increase  in  wealth  has  largely  passed 
to  those,  who  own  the  land. 

And  in  that  country  the  process  of  social  pro- 
duction and  private  appropriation  has  reached  its 
logical  conclusion.  The  peasant  and  the  artisan 
are  miserably  poor,  while  industry  itself  is  being 
gradually  impoverished  by  the  very  poverty  of  the 
producing  classes.  They  cannot  buy  what  capital 
produces.  They  are  so  poor  that  they  cannot  con- 
sume.    Everything  above  the  minimum  of   exist- 


THE  DISTRIBUTION  OF  WEALTH         193 

ence  is  taken  in  rent.  This  is  what  is  the  matter 
with  Great  Britain.  The  land  is  held  in  vast  ma- 
norial estates.  Millions  of  acres  are  kept  out  of  use 
for  hunting  preserves  and  parks.  Even  greater 
areas  are  used  for  grazing  and  careless  agriculture. 
And  that  which  is  open  to  occupancy  is  subjected 
to  the  competition  of  forty  millions  of  workers,  who 
produce  scarcely  enough  to  ward  off  eviction.  After 
the  rent  is  paid  there  is  little  left  with  which  to 
buy  other  things.  Thus  rent  starves  not  only  the 
workers,  it  starves  capital  as  well.  For  industry 
must  have  a  market.  It  can  only  flourish  where 
the  mass  of  the  people  are  able  to  consimie.  And 
in  Great  Britain  the  mass  of  the  people  are  con- 
tinually at  the  starvation  point. 

The  real  struggle  over  the  distribution  of  wealth 
is  between  the  landlord  on  the  one  hand,  and  capi- 
tal and  labor  on  the  other.  Rent  fixes  interest  and 
profits  just  as  it  fixes  wages.  All  of  the  wealth 
that  is  produced  is  divided  between  the  landlord, 
the  capitalist,  and  the  wage-earner.  These  are 
the  only  possible  claimants  among  whom  it  can  be 
distributed.  Disagreement  arises  as  to  who  re- 
ceives the  lion's  share.  We  have  seen  that  the 
share  of  the  land-owner  is  constantly  increasing  by 
the  growth  in  the  value  of  the  land.  We  have 
further  seen  that  the  great  fortunes  of  America,  as 
well  as  of  England,  are  landed  fortunes.  It  is  not 
the  capitalist  who  is  the  offender.    The  returns  of 


194  PRIVILEGE  AND  DEMOCRACY 

capital  in  the  form  of  profits  and  interest  tend 
always  to  an  equality.  They  are  automatically 
governed  by  the  average  returns  in  the  community, 
and  that  return  is  somewhere  in  the  neighborhood 
of  six  per  cent.  If  the  profits  of  a  given  industry 
rise  above  the  average,  new  capital  flows  into  the 
industry  until  competition  reduces  returns  to  that 
level.  A  conspicuous  example  of  that  fact  is  af- 
forded by  the  manufacture  of  automobiles.  The 
industry  is  scarcely  ten  years  old.  There  are  few 
privileges  connected  with  the  business.  It  requires 
an  imjnense  outlay  of  capital.  Yet  it  is  doubtful 
if  the  returns  on  the  industry  taken  as  a  whole  have 
equalled  the  current  return  on  mortgages.  In  the 
long-run  profits  and  interest  are  fixed  by  this  proc- 
ess. The  returns  of  capital  are  kept  at  a  com- 
petitive minimum  by  the  operation  of  the  law  of 
supply  and  demand. 

There  would  be  no  dispute  about  this  tendency 
were  it  not  for  the  fact  that  capital  is  so  often  con- 
fused with  some  form  of  land  monopoly.  This  is 
true  of  mining,  it  is  true  of  the  railways  and  trans- 
portation business,  it  is  true  of  the  franchise  cor- 
porations which  occupy  our  streets.  It  is  also  true 
of  many  other  industries  which  are  so  identified 
with  the  land,  with  railway  rebates,  with  the  tar- 
iff, with  patent  rights,  as  to  be  free  from  the  com- 
petition of  capital  with  capital.  But  if  wc  exclude 
such  industries  we  shall  see  that  the  capitalist  is  not 


THE  DISTRIBUTION  OF  WEALTH        195 

the  offending  party  in  the  distribution  of  wealth. 
He  suffers  along  with  the  worker. 

We  see  conclusive  evidence  of  this  fact  in  new 
countries  where  land  values  have  not  begun  to 
appear.  Here  wages  and  interest  are  high,  while 
rent  is  low.  So  long  as  the  wage-earner  can  turn 
his  hand  to  fertile  fields  of  his  own,  the  wages  of 
all  industry  will  respond  to  this  alternative.  The 
worker  will  not  labor  for  another  for  less  than  he 
can  produce  himself.  It  is  this  and  not  the  tariff 
that  has  determined  the  rate  of  wages  in  America. 
Adam  Smith  recognized  the  effect  of  cheap  land  on 
wages.  In  discussing  the  ''Causes  of  the  Prosperity 
of  New  Colonies,"  he  says:  ''Every  colonist  gets 
more  land  than  he  can  possibly  cultivate.  He 
has  no  rent  and  scarce  any  taxes  to  pay.  He  is 
eager,  therefore,  to  collect  laborers  from  all  quar- 
ters and  to  reward  them  with  the  most  liberal  wages. 
But  those  liberal  wages,  joined  to  the  plenty  and 
cheapness  of  land,  soon  make  those  laborers  leave 
him  in  order  to  become  landlords  themselves,  and 
to  reward  with  equal  liberality  other  laborers  who 
soon  leave  them  for  the  same  reason  that  they  left 
their  first  master. "  * 

The  American  West  has  demonstrated  this  theory. 
Up  to  but  yesterday  in  Oklahoma,  in  Dakota,  in 
the  mining  regions  of  Nevada,  Colorado,  and  Alaska, 
wages  were  high,  and  still  the  labor  market  was  un- 

•  Wealth  oj  Nations,  book  4,  chap.  7. 


196  PRIVILEGE  AND  DEMOCRACY 

satisfied.  Interest,  too,  ranged  from  eight  to  twelve 
per  cent.  Workmen  could  only  be  had  on  their 
own  terms.  They  could  scarcely  be  obtained  at  all. 
For  there  were  homesteads  or  mining  claims  to  be 
staked  out  at  an  insignificant  cost.  Land  was 
cheap.  It  was  accessible  to  all.  Everything  that 
it  produced  went  back  to  the  worker.  Here  we 
find  men  owning  their  own  homes.  They  enjoy  a 
freedom  that  is  not  to  be  found  in  the  East.  But 
what  will  be  the  condition  a  generation  hence?  By 
that  time  Eastern  conditions  will  have  appeared  in 
the  West.  Machines  will  do  the  work  formerly 
done  by  hand.  There  will  be  rapid  transportation 
and  communication.  There  will  be  a  far  greater 
production  of  wealth,  it  is  true.  The  per  capita 
wealth  will  be  doubled,  possibly  quadrupled.  There 
will  be  schools  and  universities,  churches  and  libra- 
ries. All  of  the  evidences  of  culture  and  refine- 
ment will  have  appeared.  But  who  will  have 
benefited  by  the  change?  Will  wages  have  ad- 
vanced? Will  interest  rates  be  higher?  Not  if 
the  experience  of  older  communities  offers  any 
proof.  Instead  of  every  man  being  a  home-owner, 
a  tenant  class  will  have  appeared.  In  the  centre 
of  every  county  there  will  be  a  jail.  There  will  be 
almshouses  and  asylums.  In  the  cities  there  will 
be  a  residuum  of  wreckage,  of  vagabonds,  and  the 
semi-criminal  class,  which,  by  some  mysterious 
process,  has  been  cast  upon  the  shores  of  society 


THE  DISTRIBUTION  OF  WEALTH        197 

by  the  very  advance  in  civilization  which  should 
have  rendered  involuntary  poverty  out  of  the  ques- 
tion. The  slum  will  come  in  with  the  mansion; 
the  prison  with  the  priest.  Where  once  there  was 
equality,  now  there  is  inequality;  where  once  there 
was  freedom,  now  there  is  servitude.  The  pro- 
duction of  wealth  will  have  increased  even  more 
rapidly  than  the  production  of  men.  In  spite  of 
this,  where  once  there  was  more  than  enough  for  all, 
now  there  is  only  enough  for  a  few,  and  hunger 
and  want  and  privation  for  the  destitute  many. 
While  the  returns  on  capital  have  fallen,  while 
wages  have  been  reduced  or  at  most  remained  sta- 
tionary, one  class,  and  one  alone,  will  have  been 
benefited  by  the  change.  The  value  of  land  will 
have  increased  with  each  passing  day.  Those  who 
own  the  land  are  better  for  the  change.  Their  in- 
comes will  have  increased  possibly  a  hundred-fold. 
On  the  other  hand  all  other  classes  will  be  the  poorer 
because  of  the  wealth  which  they  have  created. 

That  rent  is  constantly  rising,  that  it  is  higher 
to-day  than  it  was  yesterday,  that  it  will  be  higher 
to-morrow  than  it  is  to-day,  all  wili  agree.  But 
why,  it  may  be  asked,  is  this  inconsistent  with  an 
equally  rapid  increase  in  wages  ?  Why  may  not  the 
returns  of  labor  increase  even  more  rapidly  than 
the  returns  of  the  landlord,  and  the  condition  of  the 
wage-earner  in  reality  grow  better  ?  Why,  in  fine, 
does  increasing  rent  preclude  increasing  well-being  ? 


198  PRIVILEGE  AND  DEMOCRACY 

The  growth  of  population  and  the  speculative 
ownership  of  the  land  make  this  impossible.  A 
glance  into  the  future  proves  it  to  be  true.  Fifty 
years  hence  there  will  be  two  hundred  millions  of 
people  in  America.  They  will  increase  the  value 
of  the  land,  just  as  they  have  increased  the  value 
of  the  land  underlying  New  York,  which  now  ex- 
ceeds three  and  one-half  billion  dollars.  The  value 
of  the  land  will  be  more  than  doubled,  it  will  prob- 
ably be  quadrupled.  It  is  even  now  increasing  in 
value  at  the  rate  of  from  one  to  two  billion  dollars 
a  year.  Land  will  have  acquired  a  famine  price 
long  before  another  generation  has  elapsed.  And 
rent  will  increase  far  more  rapidly  than  population. 
For  land  speculation  is  intensified  by  scarcity.  In- 
creased exertion,  improved  machinery,  every  con- 
tribution of  the  arts  and  sciences,  will  but  increase 
the  value  of  the  land  and  the  tribute  which  the 
owner  will  demand  for  its  use. 

And  while  rent  will  increase,  the  incomes  of  all 
other  classes  must  fall.  More  rent  will  be  demanded 
from  the  tenant  farmer  and  the  city  dweller.  At 
the  same  time  the  relative  amount  of  land  in  use 
will  be  diminished.  Per  capita  production  will,  in 
many  lines,  fall.  Opportunities  will  be  lessened, 
while  the  cost  of  all  commodities  will  be  increased. 
There  will  be  fewer  jobs  to  go  around,  and  an  in- 
creased cost  of  living  to  all  classes.  From  this 
condition  there  is  no  escape.    To  this  indictment 


THE  DISTRIBUTION  OF  WEALTH        199 

there  is  no  confession  and  avoidance.  We  cannot 
limit  the  supply  or  increase  the  demand  for  any 
commodity  without  increasing  its  price,  and  we 
are  both  limiting  the  supply  and  increasing  the  de- 
mand for  land. 

Herein  is  the  real  iron  law  of  wages.  It  applies 
to  capital  no  less  than  to  labor.  It  is  the  ten- 
dency of  all  wages  to  fall  to  the  amount  which  will 
just  support  the  worker  and  enable  him  to  repro- 
duce his  kind.  This  is  not  a  very  generous  law. 
but  neither  is  the  law  of  the  survival  of  the  fittest. 
But  so  long  as  land  is  an  object  of  private  prop- 
erty it  is  a  law,  nevertheless.  And  from  now  on 
the  tendencies  at  work  will  lead  to  a  constant  and 
rapid  lowering  of  the  standard  of  living  in  America. 
There  will  be  a  gradual  reduction  in  the  scale 
of  expenditure  of  all  classes;  a  limitation  in  the 
outgo  for  education,  for  pleasure,  for  the  comforts 
of  life.  The  effect  of  this  change  will  not  be  con- 
fined to  the  wage-earning  or  professional  classes. 
It  will  affect  industry  as  well.  For  the  manufactu- 
rer is  dependent  upon  the  prosperity  of  the  wage- 
earner.  Industry  cannot  flourish  where  wages  are 
low.  Were  the  wages  of  America  doubled,  the  coun- 
try would  enjoy  a  period  of  prosperity  such  as  we 
have  never  experienced.  Then  men  would  be  able 
to  purchase  twice  as  much  as  they  do  to-day.  And 
just  as  an  increase  in  wages  brings  prosperity,  so  a 
general  reduction  of  wages  by  consumption  taxes 


200  PRIVILEGE  AND  DEMOCRACY 

and  rent  checks  prosperity.  And  in  time  rent  will 
increase  to  such  a  point  as  to  bring  about  perma- 
nent industrial  depression.  In  time  it  will  produce 
national  decay. 

This  is  a  question  upon  which  the  industrial  life 
of  the  nation  depends.  It  is  idle  to  look  for  any 
improvement  in  the  well-being  of  humanity  so  long 
as  the  private  ownership  of  the  land  prevails.  The 
adoption  of  sumptuary  legislation,  the  erection  of 
model  tenements  or  garden  cities,  the  municipali- 
zation of  franchise  corporations,  even  the  organi- 
zation of  labor  unions  and  the  abolition  of  unjust 
taxes,  these  reforms  may  bring  temporary  or  local 
relief.  But  so  long  as  the  private  ownership  of  the 
land  remains,  wages  and  interest  must  tend  to  fall 
to  the  subsistence  level,  to  the  point  where  the  wage- 
earner  can  only  sustain  life. 

Unfortunately  even  this  cheerless  comfort  is  not 
left  to  those  who  look  upon  this  as  the  best  of  all 
possible  worlds.  For  population  pays  no  attention 
to  the  laws  of  political  economy.  The  birth  rate 
increases  without  thought  of  the  checks  and  re- 
straints which  the  economists  of  the  early  half  of  the 
last  century  sought  to  have  the  laboring  class  impose 
upon  themselves.  And  when  the  land  is  all  taken 
up,  when  even  the  marginal  land  is  under  cultiva- 
tion, humanity  will  still  continue  to  crowd  in  upon 
the  earth  and  clamor  for  its  chance  to  live.  Then 
the  value  of  labor,  like  the  value  of  any  other  com- 


THE  DISTRIBUTION  OF  WEALTH        201 

modity  produced  in  excess  of  the  current  demand, 
will  fall  to  zero.  Then  an  increasing  residuum 
will  not  even  receive  a  subsistence  wage.  Then 
the  monopoly  of  the  land  will  bring  famine.  For 
famine  can  exist  in  the  midst  of  plenty;  it  can 
exist  where  civilization  has  flowered  to  its  highest. 


CHAPTER  XVII 
THE  ASCENDANCY  OF  PRIVILEGE 

Humanity,  as  we  have  seen,  has  bound  itself, 
as  the  Lilliputians  bound  Gulliver,  with  a  thousand 
thongs.  It  is  fettered  by  its  own  institutions;  it  is 
bound  by  its  own  laws.  Freedom  is  progressively 
reduced  by  privilege  and  monopoly  in  every  depart- 
ment of  life.  Again,  as  under  the  ancient  regime, 
society  is  enmeshed  with  class-made  laws,  which 
interfere,  at  every  turn,  with  the  production,  dis- 
tribution, and  exchange  of  wealth. 

In  the  opening  paragraph  of  Protection  and 
Free  Trade  Henry  George  has  symbolized  the 
condition  of  modern  society  in  the  following  words: 
''Near  the  window  by  which  I  write  a  great  bull  is 
tethered  by  the  nose.  Grazing  round  and  round 
he  has  wound  his  rope  about  the  stake  until  now 
he  stands  a  close  prisoner,  tantalized  by  rich  grass 
he  cannot  reach,  unable  even  to  toss  his  head  to 
rid  him  of  the  flies  that  cluster  on  his  shoulders. 
Now  and  again  he  struggles  vainly,  and,  after  piti- 
ful bellowings,  relapses  into  silent  misery. 

"This  bull,  a  very  tj^e  of  massive  strength,  who, 
because  he  has  not  wit  enough  to  see  how  he  might 

202 


THE  ASCENDANCY  OF  PRIVILEGE       203 

be  free,  suffers  want  in  sight  of  plenty,  and  is  help- 
lessly preyed  upon  by  weaker  creatures,  seems  to 
me  no  unfair  emblem  of  the  working  classes. " 

We  are  the  architects  of  our  own  misfortunes. 
We  have  created  the  millionaire  along  with  the  pau- 
per, the  palace  along  with  the  slum,  by  laws  in- 
scribed on  the  statute  books  at  Washington,  in  the 
capitals  of  our  states,  and  in  the  council  chambers 
of  our  cities.  It  is  through  legislation  that  America 
has  been  divided  into  classes,  the  class  which  pro- 
duces the  wealth  of  the  world  and  the  class  which 
appropriates  it.  For  classes  have  arisen  in  this 
country,  however  much  we  may  seek  to  disguise 
it.  But  the  line  of  division  is  not  between  the  capi- 
talist and  the  wage-earner;  it  is  between  those  who 
are  encamped  within  and  those  who  are  encamped 
without  the  citadel  of  laws  which  the  ascendant 
class  has  erected  for  its  own  advantage.  For  the 
control  of  the  government  has  been  in  the  hands  of 
an  economic  class  almost  continuously  from  the 
very  beginning. 

The  struggle  to  control  the  government  made 
its  appearance  with  the  birth  of  the  nation.  The 
protective  tariff,  the  excise  laws,  the  national  bank 
act,  these,  together  with  the  assumption  of  the 
debts  of  the  states,  as  proposed  by  Hamilton,  were 
inspired  by  the  interests  of  the  commercial  classes 
of  the  seaboard,  who  saw  in  the  new  government 
a  means  for  promoting  their  interests. 


204  PRIVILEGE  AND  DEMOCRACY 

Hamilton  was  the  protagonist  of  these  classes, 
just  as  he  had  been  in  the  Constitutional  Conven- 
tion. He  laid  the  foundations  on  which  privilege 
has  ever  since  reared  itself.  In  devising  a  revenue 
system  he  adopted  the  models  which  the  landed 
aristocracy  of  England  had  evolved  to  shift  the 
burdens  of  government  onto  the  poor.  This,  too, 
was  a  heritage  of  feudalism.  It  came  to  us  along 
with  the  common  law  and  our  ideas  of  private 
ownership  of  the  land.  And  the  models  which 
Hamilton  used  were  the  result  of  a  conspiracy  en- 
tered into  between  Charles  II  and  the  land-owners 
in  Parliament  in  1692.  Prior  to  that  time  the  needs 
of  the  crown  had  been  largely  supplied  by  feudal 
dues  paid  by  the  great  land-owners,  just  as  dues 
and  services  were  paid  to  them  by  their  dependants. 
It  was  over  these  grants  to  the  crown  that  most 
of  the  great  constitutional  struggles  of  England 
took  place.  By  an  arrangement  entered  into  in 
the  close  of  the  seventeenth  century,  however,  these 
controversies  were  brought  to  an  end.  The  barons 
agreed  that  their  lands  should  bear  taxes  to  the 
extent  of  two  millions  of  pounds,  at  which  point 
their  taxes  were  later  irrevocably  fixed.  In  addi- 
tion to  this  the  crown  was  to  receive  certain  in- 
direct taxes  on  consumption  which  were  largely 
paid  by  the  poor.  By  this  arrangement  the  com- 
mon people  were  made  to  bear  the  bulk  of  the 
taxes,  while  the  barons  were  relieved  of  their  feudal 


THE  ASCENDANCY  OF  PRIVILEGE        205 

dues.  In  so  far  as  the  barons  are  concerned  this 
compact  has  never  been  disturbed.  Their  lands 
have  never  been  revalued  from  that  day  to  this. 
Their  land  taxes  still  remain  as  fixed  at  that  time. 
But  the  indirect  excise  and  customs  duties  paid 
by  the  poor  have  increased  until  to-day  they 
amount  to  $300,000,000  a  year.  By  this  arrange- 
ment the  king  was  assured  a  source  of  income  which 
could  not  arouse  resistance,  a  source  of  revenue 
which  has  ever  since  been  used  by  privilege.  "  Since 
that  time  there  has  been  no  serious  conflict  be- 
tween king  and  Parliament.  The  control  of  the 
purse-strings  has  passed  to  the  territorial  aris- 
tocracy. There  is  no  taxation  by  representation 
in  England  even  to-day,  and  it  is  the  attempt  to 
establish  that  fact  that  precipitated  the  budget 
fight  of  1909.  Great  Britain  is  taxed  by  an  eco- 
nomic class,  a  class  which  has  exempted  its  lands 
and  privileges  from  taxation  just  as  it  has  in 
America. 

This  was  the  system  that  Hamilton  took  as  a 
model.  It  has  remained  the  basis  of  all  subsequent 
legislation.  Under  the  first  revenue  measure  of 
Congress  wealth  as  wealth  was  entirely  relieved  of 
taxation.  A  national  bank  was  provided  for  which 
served  the  interests  of  the  Eastern  trading  classes, 
just  as  does  the  banking  system  to-day.  It  con- 
centrated the  available  credit  of  the  country  in  the 
East. 


206  PRIVILEGE  AND  DEMOCRACY 

From  the  election  of  Jefferson  down  to  the  Civil 
War  the  government  was  in  the  hands  of  the  Dem- 
ocratic party.  The  functions  of  the  Federal  Gov- 
ernment were  limited,  the  tariff  was  reduced  to  a 
revenue  basis,  and  the  government  was  tolerably 
free  from  the  control  of  the  commercial  classes. 
The  controversies  over  the  tariff  were  a  rancorous 
issue  in  Congress,  as  were  the  repeated  efforts  to  re- 
establish the  United  States  Bank.  At  no  time, 
however,  did  the  business  interests  control  the 
government  as  they  had  under  the  Federalist  party. 
They  were  held  in  check  by  the  South  and  the  West. 

During  the  generation  w^hich  preceded  the  Civil 
War  a  new  alignment  of  interests  arose.  On  the 
one  hand  were  the  manufacturing  and  trading 
classes  of  the  seaboard.  On  the  other  hand  were 
the  cotton-planters  and  slave-owners  of  the  South. 
Both  sought  to  control  the  government,  and  both 
were  animated  by  the  same  motive.  The  former 
desired  a  protective  tariff,  designed  to  give  them 
a  monopoly  of  the  home  market.  But  protection 
was  a  menace  to  the  South,  interested  as  it  was  in 
the  production  of  cotton,  tobacco,  and  sugar,  and 
desirous  of  the  freest  possible  trade  with  the  out- 
side world.  Between  these  two  economic  classes 
there  was  no  possibility  of  compromise.  And  the 
South  was  supreme  in  the  councils  of  the  nation. 
The  slave-owning  classes  controlled  the  Presidency, 
Congress,    and   even   the   Federal   judiciary.    The 


THE  ASCENDANCY  OF  PRIVILEGE        207 

patriotism  of  the  South  reflected  the  interest  of  its 
ascendant  class.  Men  rallied  to  the  call  of  South 
Carolina,  Virginia,  and  Mississippi  for  the  preserva- 
tion of  an  economic  system,  rather  than  for  any 
ideal  of  state  sovereignty.  And  the  commercial 
classes  of  the  North  were  inspired  by  no  higher 
ideals.  They  were,  primarily,  interested  in  the 
tariff.  They  desired  to  share  with  the  cotton-plant- 
ers the  privileges  which  only  the  Federal  Govern- 
ment could  bestow. 

To  the  trading  classes  of  the  East  the  Civil  War 
was  opportune.  The  representatives  of  the  slave 
states  retired  from  Congress.  There  was  now  no 
economic  class  sufficiently  cohesive  to  withstand 
the  aggressions  of  the  manufacturers.  At  the  same 
time  the  cost  of  the  war  left  the  nation  an  easy 
prey  to  the  demands  for  protection.  The  needs 
of  the  Treasury  were  insatiate.  Unparalleled  reve- 
nues had  to  be  raised.  The  manner  of  their  collec- 
tion could  not  be  too  closely  scrutinized.  The 
maintenance  of  the  Union  was  of  paramount  im- 
portance. On  the  convening  of  Congress  in  1861 
the  tariff  was  raised  in  an  unexpected  way.  From 
this  time  on  the  number  of  protected  articles,  as 
well  as  the  rates  of  duties,  was  constantly  increased. 
Scarcely  a  month  of  any  session  passed  without 
some  change  being  made.  The  tariff  acts  of  1862, 
1864,  and  1865  violated  every  tradition  of  the 
country,  and  every  expectation  of  those  who  had 


208  PRIVILEGE  AND  DEMOCRACY 

supported  the  Republican  party.  The  necessities 
of  the  war  engrafted  the  policy  of  protection  so 
completely  upon  us  that  neither  of  the  great  po- 
litical parties  has  since  been  able  to  effect  its  re- 
duction. 

An  elaborate  internal  revenue  system  was  added. 
Every  conceivable  commodity  manufactured  within 
the  country  was  taxed,  as  was  every  accessible 
transaction.  The  excise  was  designed,  as  David 
A.  Wells  has  said,  on  the  principle  of  the  Irishman 
at  Donnybrook  Fair:  "Whenever  you  see  a  head, 
hit  it;  whenever  you  see  a  commodity,  tax  it." 
Many  articles  were  taxed  over  and  over  again 
before  they  reached  the  consumer.  The  duty  on 
distilled  spirits  was  increased  until  it  amounted  to 
a  thousand  per  cent,  on  its  cost.  Taxes  on  cigars 
and  tobacco  were  repeatedly  raised  until  revenue 
evasion  became  a  most  profitable  employment. 
The  high  duties  were  responsible  for  all  sorts  of  tax 
frauds.  The  corruption  of  the  Whiskey  Ring, 
which  culminated  in  the  disclosures  of  Grant's  second 
administration,  grew  out  of  the  excise  system. 

Along  with  the  bargaining  over  the  tariff,  the 
excise  system,  and  tax  evasions  went  fraudulent 
army  contracts,  collusion  of  officials  and  specula- 
tors, and  all  of  the  corrupting  influences  which  fol- 
low in  the  trail  of  a  great  war.  Privileges  of  every 
sort  forced  an  entrance  into  Congress,  too  much 
engrossed    with   saving    the    Union    to    scrutinize 


THE  ASCENDANCY  OF  PRIVILEGE       209 

the  details  of  legislation  or  administration.  In 
these  days  of  sacrifice  on  the  part  of  the  people, 
the  foundations  of  many  princely  fortunes  were 
laid,  while  private  interests  intrenched  them- 
selves in  every  department  of  the  government. 

During  these  years  of  suffering  on  the  part  of 
the  people,  Wall  Street  identified  itself  with  Wash- 
ington. Under  the  administration  of  Secretary 
Cha^e  the  Treasury  carried  through  its  borrow- 
ing operations  with  the  aid  of  the  New  York  banks. 
BiJlions  of  securities  were  sold  at  home  and  abroad. 
An  intimacy  was  thus  established  which  has  con- 
tinued ever  since.  With  but  slight  and  occasional 
inteiTuptions,  the  Treasury  portfolio  has  been  in- 
trusted to  bankers  whose  instincts  and  interests 
have  led  them  unconsciously  to  identify  the  wel- 
fare of  the  country  with  the  business  in  which  they 
are  engaged.  The  National  Bank  Act  united  the 
government  still  more  closely  with  the  financial 
interests.  These,  together  with  the  complex  mone- 
tary system  which  has  been  created,  have  woven 
the  operations  of  the  Treasury  Department  into  a 
close  dependence  upon  the  big  financial  institutions 
of  the  country. 

Upon  the  termination  of  the  war  all  moderation 
was  thrown  to  the  winds.  Instead  of  being  reduced, 
tariff  schedules  were  increased  to  suit  whoever 
wanted  protection.  Oppressive  tax  measures  were 
fastened  upon  the  people  with  every  show  of  pa- 


210  PRIVILEGE  AND  DEMOCRACY 

triotism.  The  revenue  measures  were  framed  by 
the  big  business  interests.  Wealth  was  absolutely 
freed  from  taxation.  This  was  done  with  such  an 
assumption  of  patriotism  that  the  fearful  injustice 
of  it  all  has  been  concealed.  Yet  it  is  doubtful  if 
hereditary  privilege  in  any  country  in  Europe  has 
been  more  unscrupulous  in  the  use  of  its  power, 
or  gone  further  in  exempting  itself  from  taxation, 
than  have  the  privileged  interests  in  control  of 
Congress.  The  entire  burden  of  taxation  has  been 
thrown  upon  consumption.  No  attempt  has  been 
made  to  reach  wealth  in  any  form. 

During  the  decade  which  closed  with  1870  the 
railways  were  invited  to  the  feast.  They  took 
what  they  wanted  of  the  public  land.  In  less 
than  a  decade  the  Pacific  railways  alone  secured 
more  than  100,000,000  acres  of  the  public  domain 
as  an  aid  to  their  construction.  These  magnifi- 
cent grants,  whose  combined  area  equals  that  of 
Maine,  New  Hampshire,  Vermont,  Massachusetts, 
Rhode  Island,  Connecticut,  New  York,  New  Jersey, 
and  Pennsylvania,  were  supplemented  by  a  loan 
from  Congress  of  $60,000,000  more.  The  consid- 
eration for  these  subsidies  was  the  construction 
of  the  Pacific  railways  a  few  years  in  advance  of 
the  natural  development  of  the  West. 

Along  with  the  railways  were  corporations,  in- 
dividuals, and  syndicates  which  appropriated  forests 
and  mineral  resources,  whose  value  is  so  great  as  to  be 


THE  ASCENDANCY  OF  PRIVILEGE        211 

merely  a  matter  of  conjecture.  Members  of  Congress 
saw  no  wrong  in  conveying  to  themselves,  or  to  cor- 
porations in  which  they  were  interested,  the  richest 
lands  of  the  West. 

The  Credit  Mobilier  grew  out  of  the  railway-aid 
mania.  This  was  a  corporation  with  a  French 
name  organized  as  a  construction  company  for  the 
Union  Pacific  Railway.  Its  stockholders  were  the 
same  as  those  of  the  railway,  which  had  secured 
valuable  land  grants  from  Congress.  The  scandals 
growing  out  of  the  ownership  of  its  stock  by  public 
officials  involved  the  Vice-President,  the  Secretary 
of  the  Treasury,  the  Speaker  of  the  House  of  Rep- 
resentatives, and  many  Congressmen  who  were 
believed  to  have  been  influenced  to  vote  for  leg- 
islation favorable  to  the  railroad  by  virtue  of  the 
stock  which  they  held  in  the  company. 

Thus  the  necessities  of  the  Civil  War  commer- 
cialized the  government.  So  absorbed  was  the 
public  in  a  struggle  for  self-preservation,  that  priv- 
ilege gained  an  easy  entrance  into  our  politics. 
The  slave-owning  oligarchy  had  been  content  with 
the  status  quo.  It  was  on  the  defensive.  In  the 
years  which  followed  the  war,  however,  privilege 
became  arrogant.  It  came  to  believe  that  business 
is  the  sole  end  of  the  government.  The  exhaustion 
of  the  struggle  left  the  people  an  easy  prey  to 
such  a  philosophy,  a  philosophy  from  which  they 
are  just  beginning  to  be  aroused. 


212  PRIVILEGE  AND  DEMOCRACY 

Following  the  close  of  the  war,  a  revenue  com- 
mission was  appointed  to  devise  means  for  the  re- 
form of  the  revenues.  An  immediate  reduction  of 
the  tariff  and  internal  taxes  was  recommended. 
But  Congress  refused  to  reduce  the  tariff,  although 
an  immediate  abatement  in  the  excise  duties  was 
ordered.  For  the  purpose  of  endearing  the  tarifif 
to  the  wage-earner,  a  deadly  parallel  was  drawn 
to  show  the  impoverished  condition  of  labor  under 
free  trade  in  England.  Since  that  time  the  pro- 
tection of  American  labor  has  been  the  wall  behind 
which  the  trusts  have  sheltered  themselves.  In 
each  successive  campaign  this  argument  has  been 
paraded  to  the  exclusion  of  all  other  matters  of 
national  concern.  Finally,  after  years  of  agita- 
tion, Mr.  Cleveland  was  elected  President  in  1892, 
on  the  platform  of  tariff  reform.  For  the  first  time 
since  the  war  both  houses  of  Congress,  as  well  as 
the  Presidency,  were  in  the  hands  of  the  Demo- 
cratic party,  and  the  programme  of  tariff  revision  to 
which  the  party  was  pledged  was  ready  for  enact- 
ment. But  what  was  the  outcome?  We  had  sown 
the  wind;  we  were  to  reap  the  whirlwind.  One 
of  the  costs  of  protection  appeared  in  the  Wilson- 
Gorman  Bill,  which  was  finally  presented  to  the 
country.  This  measure  purported  to  reduce  the 
tariff,  and  in  many  instances  did  so,  but  so  little 
disguised  was  the  policy  of  protection  in  it,  and 
so   shamelessly   had   'tariff   reform"   been   aban- 


THE  ASCENDANCY  OF  PRIVILEGE       213 

doned  that  the  country  repudiated  the  measure. 
The  contest  before  the  people  had  been  an  honest 
one.  In  Congress  it  was  not  one  of  principle,  not 
one  of  the  country's  well-being.  It  was  a  struggle 
of  warring  interests  which  openly  bought  pro- 
tection or  secured  control  of  the  party  in  power. 
At  the  next  election  the  Democratic  party  was 
defeated  and  discredited.  It  has  never  regained 
the  confidence  of  the  people. 

During  the  intervening  years  politics  and  privi- 
lege have  been  merged.  The  Federal  Government 
has  passed  into  the  hands  of  an  ascendant 
economic  class.  The  brain  of  this  merger  is  in 
Wall  Street.  From  this  nerve  centre  the  outer- 
most extremities  of  our  social  and  political  life 
are  controlled.  In  this  merger  the  railway  in- 
terests predominate.  For  they  are  concerned  with 
state  as  well  as  Federal  legislation.  They  are 
perfectly  catholic  in  their  politics  and  identify 
themselves  with  the  Republican  party  in  a  Repub- 
lican state  and  the  Democratic  party  in  a  Dem- 
ocratic state.  In  most  instances  the  railways 
control  or  constantly  seek  to  control  both  parties. 
Here  and  there  the  railway  interests  are  subordi- 
nate to  those  of  the  mine-owner,  the  franchise  cor- 
poration, or  the  land  and  timber  interests  of  the 
West.  These  great  interests,  with  their  capitaliza- 
tion of  from  twenty-five  to  forty  billions  of  dollars, 
are  concentrated   in  Wall    Street.    They    respond 


214  PRIVILEGE  AND  DEMOCRACY 

sympathetically  to  any  action  which  threatens 
their  political  control  or  imperils  their  privileges. 

These  interests  ramify  back  and  forth  into  one 
another  much  as  the  crowned  heads  of  Europe  are 
united  by  marriage  connections.  They  have  com- 
mon boards  of  directors.  They  are  united  by  a 
class-conscious  instinct,  and  are  in  perfect  harmony 
as  to  their  interests. 

In  every  city  may  be  found  a  group  of  lesser 
feudal  barons.  They  own  the  minor  privileges. 
Their  instincts  are  the  same  as  those  of  Wall  Street. 
They  control  the  local  press  and  the  agencies  of 
public  opinion.  They  corrupt  the  governments  of 
city  and  state.  Between  them  and  the  great  mass 
of  the  people  there  is  a  natural  line  of  cleavage. 
On  the  one  hand  are  those  who  control  the  gov- 
ernment in  their  own  interest.  On  the  other  hand 
are  those  who  do  not. 

It  is  by  this  process  that  the  politics  of  America 
have  passed  into  the  hands  of  an  economic  class. 
Again,  as  in  ante-bellum  days,  privilege  is  ascend- 
ant. The  class  which  rules  is  small  in  numbers, 
but  powerful  in  influence,  as  any  one  learns  who 
dares  to  touch  the  least  of  its  preserves. 

How  costly  this  merger  of  politics  and  privilege 
is  to  the  people  and  the  ideals  of  democracy  will 
be  shown  in  the  next  chapter. 


CHAPTER  XVIII 
AN  OVERLOOKED  CAUSE  OF  POVERTY 

''Laws/'  says  Rousseau,  "are  always  useful  to 
those  who  own,  and  injurious  to  those  who  do  not." 
A  discerning  political  philosopher  of  the  eighteenth 
century  has  said:  ''A  man  does  not  possess  a  de- 
mesne because  he  is  a  prince,  but  he  is  a  prince 
because  he  possesses  a  demesne."  This  is  but 
another  way  of  saying  that  whoever  owns  a  nation 
rules  it,  and  whoever  rules  a  nation  will  come  in 
time  to  own  it  as  well. 

It  is  not  dishonesty  so  much  as  the  myriad  in- 
fluences which  mould  men's  minds  that  makes  this 
true.  A  government  of  bankers  honestly  believes 
that  the  welfare  of  the  nation  is  bound  up  in  the 
welfare  of  the  banking  interests;  a  government 
of  manufacturers  honestly  believes  that  the  pros- 
perity of  the  country  is  determined  by  the  pros- 
perity of  its  class;  a  government  of  railway-owners 
measures  national  well-being  by  railway  earnings; 
while  mine-owners,  landlords,  brewers,  distillers, 
saloon-keepers,  peasants,  workers, — every  class,  in 
fact,  seeks  to  mould  the  government  to  its  own 
particular  interest.  This  is  the  economic  interpreta- 
tion of  politics. 

215 


216  PRIVILEGE  AND  DEMOCRACY 

And  the  ascendant  class  in  America  is  a  law- 
made  class.  It  is  not  predominantly  a  landed  class 
as  it  is  in  Great  Britain  and  Russia.  Neither  is 
it  a  capitalist  class  as  the  socialist  asserts.  It  is 
a  privileged  class.  It  includes,  first,  the  railways 
and  the  transportation  agencies;  second,  the  pro- 
tected industries,  and  third,  the  franchise  and  other 
public  service  corporations.  The  combined  capi- 
talization of  these  industries  is  not  far  from  twenty- 
five  billion  dollars.  This  is  more  than  one-fifth 
of  the  total  estimated  wealth  of  America.  From 
one-half  to  two-thirds  of  this  capitalization  is  the 
direct  creation  of  law.  It  arises  from  exclusive 
grants,  like  city  franchises,  monopoly  privileges 
made  possible  by  the  tariff,  exemptions  from  taxa- 
tion obtained  through  a  control  of  the  government 
or  the  right  to  employ  some  other  exclusive  or 
sovereign  power.  And  it  is  to  secure,  protect,  and 
retain  these  monopoly  privileges,  to  collect  tribute 
by  means  of  them,  and  to  capitalize  that  tribute 
in  watered  securities  that  these  interests  are  lured 
into  politics.  It  is  this  that  has  woven  them  into 
the  life  of  the  nation. 

An  examination  of  the  blue-book  of  American 
millionaires  will  disclose  that,  almost  without  ex- 
ception, the  colossal  fortunes  which  have  come 
into  existence  in  recent  years  are  the  creation  of 
law.  They  have  not  been  created  by  law-breakers. 
They  have  been  created  by  law-makers.    They  have 


AN  OVERLOOKED  CAUSE  OF  POVERTY  217 

not  been  acquired  dishonestly  through  corruption 
alone ;  nor  have  they  been  acquired  honestly  through 
ignorance  alone.  Ignorance  and  design,  honesty 
and  dishonesty,  have  alike  contributed  to  their 
creation.  The  proximate  cause  is  the  control  of 
our  politics  by  an  economic  class. 

Let  us  trace  some  of  the  costs  of  this  class  con- 
trol. It  is  most  apparent  in  taxation.  This  is 
ever  the  favorite  tool  of  the  privileged  orders.  The 
total  Federal  revenues  for  the  fiscal  year  1908 
amounted  to  $601,126,118.  This  does  not  include 
the  postal  receipts.  Of  this  sum  $286,113,130 
was  collected  from  customs  duties,  and  $251,711,126 
from  the  excise  or  internal  revenue  taxes  on  dis- 
tilled and  malt  liquors,  tobacco,  and  oleomarga- 
rine. $537,824,256  was  thus  collected  by  indirect 
taxes  upon  consumption.  The  tax  on  sugar  yielded 
$50,118,141;  wool  and  cotton  manufactures  yielded 
$63,445,017  more;  while  leather,  hides,  wearing  ap- 
parel, china-ware,  flax,  hemp,  and  yarn  products, 
iron  and  steel,  fruit  and  drugs,  glass  ware,  chemi- 
cals, wines,  spirits,  and  tobacco  yielded  the  greater 
part  of  the  balance.  We  have  taxed  almost  every 
necessity  of  life.  The  great  bulk  of  the  revenue 
comes  from  those  articles  which  the  poor  consume. 
But  an  insignificant  fraction  is  collected  from  the 
luxuries  of  the  well-to-do  classes.  And  not  a  dol- 
lar is  taken  from  wealth,  incomes,  or  inheritances 
direct. 


218  PRIVILEGE  AND  DEMOCRACY 

It  is  the  poor  of  America  who  support  the  Fed- 
eral Government.  It  is  they  who  pay  for  the 
battle-ships  and  the  pensions,  the  internal  improve- 
ments and  the  coast  defences.  Not  one  penny 
comes  directly  from  the  interests  which  are  mainly 
benefited  by  these  expenditures. 

But  the  burdens  of  indirect  taxation  do  not  end 
with  the  taxes  collected.  This  is  the  least  of  the 
cost.  The  protective  tariff  is  not  primarily  for 
revenue  purposes.  It  is  designed  in  the  interest 
of  a  privileged  class.  Sheltered  behind  the  tariff 
wall,  the  sugar,  meat,  steel,  coal,  iron,  leather, 
wool,  copper,  oil,  and  other  combinations  exact 
monopoly  prices  from  the  consumer  of  America. 
The  amount  of  the  tribute  which  is  thus  collected 
cannot  be  accurately  known.  There  are  over  2,000 
articles  on  the  tariff  schedule.  It  has  been  esti- 
mated that  the  monopoly  prices  exacted  through 
the  duty  on  sugar  alone  amount  to  from  $140,000,- 
000  to  $165,000,000  a  year.  Prof.  W.  G.  Sumner 
of  Yale  University  estimated  that  the  tariff  in- 
creased prices  all  around  from  thirty  to  forty  per 
cent.  The  average  ad  valorem  rate  is  42.92  per 
cent.  The  tribute  which  the  protected  interests 
exact  is  not  far  from  $1,500,000,000.' 

•  The  Tariff  Reform  Committee  of  the  New  York  Reform  Club, 
estimating  the  real  cost  of  protection  in  its  effect  upon  prices,  says: 
"The  total  price  of  manufactured  goods  sold  to  final  consumers  in 
this  country  can  hardly  be  less  than  $6,000,000,000  and  may  be  aa 
high  as  $8,000,000,000.     If,  as  is  reasonable  and  probable,  their 


AN  OVERLOOKED  CAUSE  OF  POVERTY  219 

Including  the  revenues  actually  collected  from 
indirect  taxes,  every  man,  woman,  and  child  is 
robbed  of  approximately  twenty  dollars  a  year  for 
the  advantage  of  the  tariff  interests.  Of  this  three 
and  one-half  dollars  reaches  the  treasury.  The 
balance  is  monopoly  cost.  Every  family  of  five 
pays  tribute  to  the  extent  of  $100  per  annum  to 
the  class  which  rules.  The  average  income  of  the 
working-classes  in  America  is  below  $450  a  year. 
The  census  figures  place  the  average  wage  at 
$432.40.^  Even  this  is  probably  an  overestimate 
when  we  consider  the  large  percentage  who  are 
constantly  out  of  work,  and  the  increasing  number 
of  woman  and  child  laborers  whose  incomes  are 
very  much  below  this  figure.  But  these  are  the 
classes  who  maintain  the  government.  It  is  they 
who  consume  the  great  bulk  of  the  imports  as  well 
as  the  products  of  the  protected  industries.  Out 
of  their  meagre  earnings  the  government  filches 
from  one-fifth  to  one-fourth  by  indirect  taxes  and 
the  monopoly  prices  which  the  tariff  makes  possible. 

(the  protected)  goods  are  worth  twenty  per  cent,  more  in  the  home 
market  than  they  would  .  .  .  command  in  our  markets  were  there 
no  tariff-protected  trusts  and  monopoHes  in  control  here,  then  we  are 
paying  something  more  than  $1,000,000,000  for  our  tariff  whistle. 
This  is  the  cost  at  wholesale  prices.  At  retail  prices  the  cost  of 
'protection'  is  probably  $1,500,000,000,  or  $1,600,000,000.  This  is 
about  $90.00  per  family  for  our  entire  population. " 

'The  census  for  1900  gives  the  total  average  number  of  wage- 
earners  in  the  United  States  as  5,373,108  and  the  total  wages  paid 
as  $2,324,453,993.  The  average  wage  for  the  country  was  therefore 
$432.40  for  the  year.— United  States  Census,  Vol.  VII,  p.  xlviii. 


220  PRIVILEGE  AND  DEMOCRACY 

We  hear  but  little  of  this  burden.  The  con- 
sumer cannot  trace  his  falling  standard  of  living 
to  its  source.  There  is  no  paid  lobby,  no  press,  no 
spokesman  for  those  who  only  toil.  Now  and  then 
there  comes  a  protest  against  this  inequity.  ''The 
tariff  has  built  up  an  aristocracy  already  quite  as 
numerous  as  were  the  refractory  slave-owners  in 
the  South,"  says  the  Hon.  John  Bigelow  of  New 
York.  "It  has  built  it  up,  too,  by  privileges  quite 
as  unjust  and  as  exclusively  for  money's  worth, 
but  a  thousand  times  more  lucrative  to  its  benefi- 
ciaries than  slavery  ever  was.  The  consequences 
are  that  it  has  divided  our  people  into  two  classes 
— one,  of  the  people  who  have  more  wealth  than  they 
know  what  to  do  with  or  how  to  give  away,  and 
another,  of  bread-winners,  who,  if  they  lose  a  day's 
wages,  even  by  illness,  have  to  go  in  debt  for  their 
next  day's  expenses.  The  increased  cost  of  living 
compels  an  increase  in  wages  from  time  to  time, 
but  always  the  cost  of  living  increases  faster,  until 
now  the  food  of  the  proletariat  has  reached  famine 
prices  in  most  of  our  large  cities  and  is  daily  in- 
creasing. With  food  enough  produced  in  the  United 
States  to  nourish  twice  its  population,  the  average 
wage  earner  can  lay  up  nothing,  can  provide  few 
privileges  for  his  family  and  practically  no  recrea- 
tion." ' 

'  Extract  from  published  letter  from  Hon.  John  Bigelow  to  Gov- 
ernor Hughes  of  New  York,  November  25,  1908. 


AN  OVERLOOKED  CAUSE  OF  POVERTY  221 

In  a  letter  to  the  Committee  of  Ways  and  Means, 
hearing  evidence  upon  the  present  tariff  in  No- 
vember, 1907,  Mr.  Charles  Francis  Adams  of  Boston 
said:  ''Speaking  after  the  manner  of  men,  they 
[the  protected  interests]  are  either  thieves  or  hogs. 
I  myself  belong  to  the  former  class.  I  am  a  tariff 
thief,  and  as  such  I  have  a  license  to  steal.  It 
bears  the  broad  seal  of  the  United  States,  and  is 
what  is  known  as  the  'Dingley  Tariff.'  I  stole 
under  it  yesterday;  I  am  stealing  under  it  to-day; 
I  propose  to  steal  under  it  to-morrow.  But,  on  the 
other  hand,  I  am  also  a  radical  tariff  reformer.  I 
would  like  to  see  every  protective  schedule  swept 
out  of  existence. " 

Not  only  does  the  protective  tariff  impoverish 
the  people  and  promote  corruption,  it  encourages 
extravagance  as  well.  The  carnival  of  expendi- 
ture, to  which  we  became  accustomed  during  the 
Civil  War,  and  which  has  continued  ever  since,  is 
directly  traceable  to  the  system  of  indirect  taxa- 
tion. In  1860  the  total  ordinary  expenditures  of 
the  Federal  Government  were  but  $63,130,000. 
By  1900  they  had  shot  up  to  $487,713,000.  By 
1908  they  had  still  further  increased  to  $659,196,000. 
While  the  population  increased  178  per  cent,  ex- 
penditures increased  over  1,000  per  cent.  A  war 
and  a  naval  programme  has  been  entered  upon, 
whose  cost  to  the  nation  is  now  $294,000,000  a 
year.    The  annual  expenditure  for  pensions,  even 


222  PRIVILEGE  AND  DEMOCRACY 

with  the  war  half  a  century  away,  amounts  to 
$154,000,000.  The  pension  bill  is  higher  to-day 
than  it  was  ten  years  ago. 

We  have  reversed  every  principle  of  sound  finan- 
cing. We  do  not  collect  what  we  reasonably  need; 
we  spend  what  the  tariff,  designed  in  the  interest 
of  a  class,  produces.  An  expenditure  of  nearly 
$350,000,000  for  war,  navy,  and  pension  purposes 
would  meet  with  a  far  different  reception  were 
taxes  laid  upon  wealth  rather  than  upon  consump- 
tion. The  cost  of  the  government  would  prob- 
ably shrink  to  one-half  its  present  volume  were 
privilege  taxed  instead  of  labor.  For  direct  taxes 
compel  caution,  scrutiny,  and  responsibility.  In- 
direct taxes  breed  extravagance,  corruption,  and 
war.  Congress  would  not  even  consider  a  ship 
subsidy  bill  if  privileged  wealth  paid  the  cost  of  it 
all.  War  would  come  to  an  end  to-morrow  were 
those  who  benefited  by  its  happening  compelled 
to  pay  for  its  maintenance.  There  would  be  no 
need  of  peace  conferences  were  the  government  to 
make  forcible  requisition  on  wealth  before  it  made 
requisition  on  human  life.  Were  the  billions  ex- 
pended annually  on  the  armaments  of  the  world 
collected  from  direct  taxes  upon  the  land,  upon 
the  railways,  upon  incomes  and  inheritances,  every 
agency  of  public  opinion  would  be  on  the  side  of 
peace.  Were  the  rich  and  powerful  classes  the 
first   to   suffer   from   a   declaration    of    hostilities, 


AN  OVERLOOKED  CAUSE  OF  POVERTY  223 

the  press  and  every  agency  of  public  opinion  would 
be  on  the  side  of  arbitration.  Then  there  would 
arise  a  demand  for  the  settlement  of  the  disputes 
of  the  world  that  would  be  irresistible.  Then  the 
financiers,  who  find  in  war  a  source  of  profit  to 
themselves,  would  coerce  their  rulers  into  a  concord 
of  nations.  For  war  only  persists  because  the 
privileged  orders  are  able  to  throw  its  cost  onto  the 
defenceless  members  of  the  community. 

These  are  some  of  the  costs  of  the  tariff.  It  is 
not  an  isolated  fiscal  question.  It  is  not  alone  a 
social  question.  The  tariff  is  woven  into  every 
fibre  of  our  politics,  from  the  smallest  hamlet  to 
the  United  States  Senate.  Quoting  again  from 
the  letter  to  the  Ways  and  Means  Committee  of 
Congress,  Mr.  Charles  Francis  Adams  says:  "  Mean- 
while let  me  add,  without  any  doubt  in  my  own 
mind  as  to  the  accuracy,  and  I  may  say  the 
moderation,  of  the  statement,  that  in  the  heyday 
of  its  strength  and  arrogance  the  old  slave  power 
of  the  South  was  never  so  strongly  intrenched  in 
its  position,  so  defiant  in  its  attitude,  so  corrupting 
in  its  influence,  so  difficult  to  be  overthrown,  or  so 
utterly  insatiable  in  its  demands  and  so  unscrupu- 
lous in  its  methods  of  satisfying  those  demands,  as 
are  to-day  the  combined  tariff-protected  interests  of 
the  country.  An  overgrown  octopus,  their  tentacles 
are  all-pervasive,  as,  from  the  self-interested  point 
of  view,  their  arguments  are  convincing." 


224  PRIVILEGE  AND  DEMOCRACY 

A  superstition  has  been  created  about  the  policy 
of  protection  which  poisons  every  agency  of  pubhc 
opinion.  It  prevents  its  free  discussion  in  the  press, 
the  university,  or  in  business  circles.  The  ghost  of 
hard  times  is  held  up  before  the  working  man  and 
the  farmer,  the  shopkeeper  and  the  manufacturer. 
The  most  scandalous  abuses  may  not  be  corrected, 
for  fear  of  opening  up  the  whole  schedule.  For, 
once  the  principle  of  protection  is  questioned,  the  en- 
tire superstmcture  may  be  undermined  by  inquiry. 
The  scandalous  extortions  of  monopoly  go  on  unre- 
buked,  because  of  the  multitude  of  noisy  interests 
which  make  use  of  its  power  to  protect  themselves 
from  disturbance. 

The  protected  interests  obtained  their  control 
during  the  Civil  War.  They  have  never  been  dis- 
lodged. In  a  sense,  they  are  now  subordinate  to 
the  railways,  the  transportation  and  the  franchise 
corporations,  which  have  been  invited  to  a  share  in 
the  plunder.  With  them  are  allied  the  banking 
and  financial  institutions,  which  own  the  public 
service  corporations.  In  the  West  the  land  and 
timber  thieves  are  a  part  of  the  system.  The  rail- 
roads, running  into  every  state  in  the  Union,  form 
the  foundations  of  the  merger.  They  lend  the  West 
and  South  to  the  designs  of  the  privileged  East. 
Their  attorneys  are  active  in  local  politics.  They 
are  to  be  found  in  every  state  legislature.  They 
mould  public  opinion  and  draft  party  platforms. 


AN  OVERLOOKED  CAUSE  OF  POVERTY  225 

They  are  a  hireling  class  and  justify  their  actions  by 
the  serviceable  ethics  of  the  common  law,  which 
commands  a  lawyer  to  represent  whatever  client 
demands  his  services. 

The  railways  are  drawn  into  politics  by  the  very 
nature  of  their  business.  They  are  quasi-public 
agents,  they  enjoy  a  portion  of  the  sovereignty  of 
the  state.  They  are  the  highways  of  modern  civ- 
ilization. The  franchise  corporations  are  natural 
monopolies.  They  are  made  monopolies  by  law. 
They  occupy  public  property.  Like  the  railways 
and  the  protected  interests,  they  are  drawn  into 
politics,  not  to  protect  their  property,  but  to  pro- 
tect their  privileges,  which  in  these  instances  are 
the  privilege  of  being  a  monopoly.  They  can  only 
avoid  regulation  or  ownership  by  controlling  the 
government  from  which  they  draw  their  life. 

We  have  seen  that  the  capitalization  of  the  rail- 
ways has  increased  from  $10,635,008,074  in  1897  to 
$16,082,146,683  in  1907.  During  the  same  period 
their  gross  earnings  have  grown  from  $1,122,089,773 
to  $2,589,105,578,  while  net  earnings  have  in- 
creased from  $369,565,009  in  1897  to  $840,589,764 
in  1907.  Like  rent,  the  earnings  of  the  railways  and 
the  public  service  corporations  grow  with  popula- 
tion and  industry.  They  need  only  provide  the  ser- 
vice; the  demand  increases  with  each  passing  day. 
This  increased  capitalization,  earnings,  and  divi- 
dends is  largely  society's  contribution  to  their  own- 


226  PRIVILEGE  AND  DEMOCRACY 

ers.*  For,  while  railway  mileage  increased  but  22.2 
per  cent,  from  1896  to  1906,  railway  dividends  in- 
creased by  200  per  cent. 

And  it  is  to  protect  this  '^  unearned  increment/' 
this  social  value,  from  taxation  and  regulation,  that 
the  railways  find  it  necessary  to  become  the  govern- 
ment. The  monopoly  tribute  which  they  exact 
in  excessive  rates  and  charges  is  not  less  than 
$300,000,000  a  year.  Measured  by  a  fair  return 
on  the  actual  capital  invested  by  the  owners  in  the 
property,  it  is  probably  twice  this  sum.  The  trib- 
ute of  the  other  public  utility  and  franchise  corpora- 
tions is  $200,000,000  more.  This  is  the  annual 
cost  of  the  private  ownership  of  the  highways  and 
the  public  service  corporations  of  the  nation. 

The  local  taxing  authorities  are  controlled  for  the 
same  purpose.  Not  content  with  exemption  from 
Federal  taxation,  privilege  has  evaded  the  bulk  of 
its  local  taxes  as  well.  The  amount  of  the  evasion 
is  colossal.    For  the  year  ending  June  30,  1903,  the 

iThis  social  value,  this  unearned  increment,  which  railways  en- 
joy is  recognized  by  privilege.  It  is  the  basis  of  the  constant 
watering  of  securities.  Wall  Street  occasionally  expresses  it  openly, 
as  in  the  following  editorial  from  Moody's  Magazine  for  January, 
1909.  It  says,  page  6:  "There  can  be  no  cessation  of  this  steady 
growth  in  value  of  railroad  property  in  a  large  sense  as  long  as  the 
population  of  the  coimtry  increases,  rights  of  way  and  terminal 
sites  grow  in  value,  and  natural  resources  are  opened  up  and  de- 
veloped. .  .  .  Like  the  public  utility  corporation  which  enjoys  a 
perpetual  franchise,  and  like  the  owner  of  realty  in  the  heart  of  a 
growing  community,  every  year  must  automatically  add  to  the 
equity  back  of  railroad  securities,  despite  government  regulation  or 
other  ordinary  legislation." 


AN  OVERLOOKED  CAUSE  OF  POVERTY  227 

railways  of  the  country  paid  in  taxes  the  sum  of 
$57,797,737.  In  the  year  1904  their  commercial 
value,  as  ascertained  by  the  Census  Bureau,  was 
$11,244,852,000/  The  total  taxes  paid  amounted 
to  but  one-half  of  one  per  cent,  on  this  value.  VV^ere 
the  railways  assessed  as  are  the  farmer  and  the 
home-owner  they  would  have  paid  from  $168,672,000 
to  $224,897,000.' 

The  evasions  of  the  express,  telegraph,  sleeping- 
car,  pipe-line,  fast-freight,  telephone,  street  and 
interurban  railway,  gas,  water,  and  electric-light- 
ing companies  are  equally  colossal.  They,  too,  are 
assessed  on  but  a  fraction  of  their  value.  Only  in 
rare  instances  are  their  franchises  taxed  at  all. 
Prior  to  the  passage  of  the  franchise  tax  law  in  New 
York  in  1903,  the  public  service  corporations  of  the 
state  were  assessed  on  their  physical  property. 
This  law  increased  their  valuation  by  $235,000,000 
in  New  York  city  alone.  The  constitutionality  of 
the  law  was  contested  from  court  to  court.  It  was 
finally  affirmed  by  the  Supreme  Court  of  the  United 
States.^ 

'  Commercial  Valuation  of  Railway  Operating  Property,  Bulletin 
21,  Bureau  of  the  Census,  p.  8.  This  year  is  taken  rather  than  a 
later  one  because  of  the  census  valuation  of  1904. 

^  Estimating  ordinary  taxes  at  one  and  one-half  per  cent,  and  two 
per  cent.,  respectively. 

^  The  capitalized  value  of  the  street  and  electric  railways  of  the 
country  in  1902  was  $2,308,282,000  or  $139,778.7  a  mile.  (Bulletin 
of  the  Census,  Street  and  Electric  Railways,  p.  11.)  This  is  from 
two  to  three  times  their  cost  of  construction.  They  paid  in  taxes 
but  $13,078,899  or  approximately  one-half  of  one  per  cent,  on  their 


228  PRIVILEGE  AND  DEMOCRACY 

In  1905  the  United  States  Steel  Corporation  paid 
in  taxes  but  $3,646,490.  Its  capitalization  was 
$1,637,811,000.  The  taxes  paid  were  a  trifle  over 
one-fifth  of  one  per  cent,  on  the  value.  Were  the 
Steel  Trust  taxed  at  the  average  rate  of  other  prop- 
erty, it  would  pay  into  the  treasuries  of  the  various 
states  at  least  $20,000,000,  or  six  times  its  present 
taxes. 

Were  we  to  add  to  these  losses  those  of  the  coal 
and  the  iron,  the  oil  and  the  gas,  the  copper  and 
other  mining  monopolies,  which  are  still  assessed  as 
farming  land  and  which  have  passed  under  the  con- 
trol of  monopoly,  we  should  have  a  total  of  tax 
evasions  by  these  interests  in  the  neighborhood  of 
$100,000,000  a  year.  If  to  this  were  added  the  eva- 
sions of  the  railways  and  the  public  service  corpora- 
tions, the  grand  total  would  amount  to  not  far  from 
$250,000,000  a  year.    It  may  exceed  this  figure. 

These  are  some  of  the  spoils  of  privilege.  These 
are  part  of  the  tribute  of  monopoly.  On  the  one 
hand,  a  control  of  Congress.  On  the  other  hand,  a 
control  of  the  states  and  the  cities.  Above  is  a 
cruelly  unjust  system  of  indirect  taxation  which 

valuation.  They  escaped  from  forty  to  fifty  millions  in  taxes.  The 
total  capital  of  the  telephone  companies  in  1902  was  $348,031,058. 
The  total  tax  paid  was  $2,944,281,  or  less  than  nine  mills  upon  their 
capital  value.  (Bureau  of  Census,  Bulletin  on  Telephones  and  Tele- 
graphs, p.  16.)  In  the  state  of  Ohio  alone  it  has  been  computed  that 
the  public  service  corporations,  including  the  railways,  escape  taxa- 
tion on  a  billion  dollars  of  value  and  evade  the  payment  of  from 
fifteen  to  twenty  millions  annually. 


AN  OVERLOOKED  CAUSE  OF  POVERTY  229 

exacts  from  one  and  a  half  to  two  billions  annually 
from  the  consuming  class;  below  is  an  equally  unjust 
system  of  local  taxation  which  increases  the  burden 
by  at  least  a  quarter  of  a  billion  more.  In  nation, 
state,  city,  there  is  a  resistance  to  regulation  and 
ownership  and  a  ceaseless  struggle  for  still  further 
privileges. 

When  it  is  borne  in  mind  that  the  total  annual 
production  of  wealth  in  America  is  $18,540,345,312,* 
the  cost  of  these  law-made  privileges  is  apparent. 
The  burden  of  indirect  taxation,  of  monopoly  rates 
and  prices,  and  the  evasion  of  local  taxes,  all  made 
possible  by  the  control  of  the  government  by  these 
privileges,  is  equal  to  one-eighth  and  possibly  one- 
sixth  of  all  the  wealth  there  is  to  distribute.  It 
probably  exceeds  the  total  amount  distributed  each 
year  in  wages  to  American  labor.^ 

Herein  is  an  overlooked  cause  of  poverty.  It  is 
not  the  chief  cause.  That  is  to  be  found  in  the 
private  ownership  of  the  land  and  the  burden  of 
rent  which  it  involves.  But  when  we  consider  that 
these  taxes  must  be  paid  from  out  the  current 
wealth  that  is  produced,  and  that  the  bulk  of  them 
are  paid  by  those  who  toil,  the  reduction  in  the 
standard  of  living  of  the  mass  of  the  people  is 
obivous.     Nearly  all  of  the  Federal  revenues  come 

•Census  estimates  of  1900. 

*  In  1900  the  total  wages  paid  in  America  amounted  to  $2,234,- 
453,993,— United  States  Census,  Vol.  VII. 


230  PRIVILEGE  AND  DEMOCRACY 

from  the  poorer  classes,  for  the  tariff  and  the  excise 
taxes  are  adjusted  to  the  articles  of  universal  con- 
sumption. They  would  yield  but  little  revenue  if 
this  were  not  true.  The  monopoly  charges  of  the 
interests  protected  by  the  tariff  reduce  the  standard 
of  living  still  further.  They,  like  the  Federal  and 
the  local  taxes,  are  collected  from  consumption. 
They  enter  into  the  cost  of  every  article  that  we 
consume.  They  are  collected  over  and  over  again 
in  the  process  of  production  and  distribution.  They 
are  paid  by  pennies,  dimes,  and  dollars,  and  chiefly 
by  the  poor. 

Privilege,  untaxed  on  what  it  owns,  thus  levies 
a  double  tribute  upon  humanity.  It  compels  the 
consumer  to  maintain  a  government  whose  expen- 
ditures are  largely  devoted  to  the  promotion  of  its 
interests,  while,  in  addition,  it  compels  him  to  pay 
excessive  prices  for  all  that  monopoly  produces  and 
all  of  the  services  which  it  renders. 


CHAPTER  XIX 
THE  CAUSE  OF  CIVILIZATION  AND  DECAY 

We  are  now  in  a  position  to  explain  the  inquiry 
with  which  we  started.  We  can  now  understand 
why  it  is  that,  in  spite  of  the  advances  in  the  arts 
and  sciences  and  with  all  of  the  improvements  in 
the  means  of  production,  poverty  continues  to 
intrude,  like  a  poor  relation  at  the  feast.  We  can 
now  understand  why  the  discoveries  of  the  mechani- 
cal world  pass  over  society,  like  a  rain-laden  cloud 
over  a  thirsty  desert,  and  leave  humanity  but  little 
better  off  than  it  was  before.  It  is  also  possible 
to  unravel  the  mystery  of  history;  to  explain  the 
laws  which  govern  the  rise  and  fall  of  nations  and 
the  destruction  of  whole  peoples  in  the  midst  of 
their  splendor. 

We  have  missed  the  purpose  of  organized  govern- 
ment. We  have  perverted  the  state  from  its  proper 
ends.  We  have  exalted  privilege  above  liberty  and 
the  rights  of  property  above  humanity.  In  this  is 
to  be  found  the  explanation  of  the  unequal  distri- 
bution of  wealth.  It  is  not  due  to  any  natural 
inequalities  in  the  endowments  of  men.  The 
princely  fortunes  which  have  come  into  existence 

231 


232  PRIVILEGE  AND  DEMOCRACY 

during  the  past  few  years  are  not  traceable  to  thrift, 
intelligence,  or  foresight  on  the  part  of  their  owners 
any  more  than  the  wide-spread  poverty  of  the  masses 
of  the  people  is  due  to  the  lack  of  these  virtues  on 
their  part.  The  laws  of  the  land  are  responsible  for 
the  billionaires,  just  as  they  are  responsible  for  the 
dock  laborers ;  they  are  responsible  for  the  Waldorf- 
Astoria,  just  as  they  are  responsible  for  Packing- 
Town. 

The  American  people  are  between  the  upper  and 
the  nether  millstones  of  law-made  privileges.  Above 
are  the  cruelly  oppressive  taxes  of  the  Federal 
Government,  which  exact  from  one  and  a  half  to 
two  billion  dollars  a  year  from  those  who  labor. 
Below  are  the  rent  of  the  land,  the  monopoly  charges 
of  the  mine-owners,  the  railways,  the  transporta- 
tion agencies,  and  the  other  public  utihty  corpora- 
tions, as  well  as  the  countless  other  monopohes, 
which  are  identified  with  the  land  or  are  directly 
traceable  to  the  tariff  or  the  railways,  and  which 
exact  from  three  to  four  billion  dollars  a  year  more. 
Struggling  between  these  law-made  privileges  are 
80,000,000  of  people,  whose  political  institutions 
have  fallen  under  the  control  of  a  class.  The  heart 
and  the  brain  of  this  merger  is  in  Wall  Street.  Its 
tentacles  reach  out  into  the  humblest  home  in  the 
land.  It  pursues  its  purpose  with  no  concern  for 
the  nation's  welfare.  It  is  deaf  and  dumb  to  any 
appeal   save  self.    It   differs  from   the  privileged 


CAUSE  OF  CIVILIZATION  AND  DECAY   233 

orders  of  other  lands  only  in  the  magnitude  of  its 
operations.  History  is  filled  with  examples  of  gov- 
ernment by  a  class,  but  history  nowhere  records  a 
nation  of  free  men,  endowed  with  the  ballot  and 
safeguarded  by  laws  of  its  own  making,  permitting 
its  highways,  its  resources,  and  its  machinery  of 
taxation  to  be  made  the  plaything  of  stock-jobbing 
interests,  in  which  the  stakes  involved  are  the 
control  of  a  continent  and  the  well-being  of 
80,000,000  of  the  most  highly  educated  people  of 
the  globe.  Yet  such  is  not  an  exaggerated  picture 
of  what  has  happened  to  America  during  the  past 
few  years. 

Whoever  controls  these  agencies  controls  a 
people's  destiny.  They  can  decree  comfort,  con- 
tentment, and  happiness,  just  as  they  can  decree 
poverty,  misery,  and  decay.  That  an  increasing  per- 
centage of  the  wealth  of  the  world  is  not  enjoyed  by 
those  who  produce  it  the  preceding  pages  indicate. 
That  this  must  be  true  is  demonstrated  by  deduc- 
tive as  well  as  by  inductive  logic.  For  there  are 
only  three  possible  claimants  to  the  wealth  that  is 
produced:  the  landlord,  the  capitalist,  and  the 
wage-earner.  If  an  increasing  share  goes  to  rent, 
the  returns  of  capital  and  labor  must  be  reduced 
pro  tanto.  According  to  the  United  States  Cen- 
sus the  wealth  produced  in  1900  amounted  to 
$18,540,345,312.  This  included  all  kinds  of  farm 
products,  the  output  of  the  mines  and  of  manu- 


234  PRIVILEGE  AND  DEMOCRACY 

facturing  plants/  The  per  capita  wealth  produced 
was  $234.04,  or  $1,170.20  for  every  family  of  five  in 
the  country.  This  was  all  there  was  to  be  dis- 
tributed. We  have  seen  that  the  land  values  of 
the  country,  including  as  land  values  the  sites  of 
the  railroads  and  public  service  corporations,  are 
at  least  $40,000,000,000.  They  probably  exceed 
$60,000,000,000.  Manifestly  these  values  can  only 
exist  because  they  yield  an  income  which  warrants 
this  valuation,  which,  calculated  at  five  per  cent., 
amounts  to  from  $2,000,000,000  to  $3,000,000,000 
per  annum.  This  is  land  rent.  It  is  the  annual 
tribute  of  the  unearned  increment.  It  can  only  be 
paid  from  out  the  current  production.  The  wealth 
to  be  divided  between  capital  and  labor  is  reduced 
by  this  charge. 

At  least  $2,000,000,000  more  is  taken  through 
indirect  taxes  on  consumption  and  the  monopoly 
charges  which  the  protected  interests  exact,  while 
from  $500,000,000  to  $700,000,000  is  appropriated 
by  the  railways  and  the  public  utility  corporations 
in  excess  of  a  reasonable  charge  for  the  services 
which  they  render. 

Out  of  the  $1,170.20  per  family,  at  least  $300.00 

'The  production  of  wealth  was  divided  by  the  census  as  follows: 

Farm  products  valued  at $4,739,118,752 

Mineral  products  valued  at 796,826,417 

Manufactured  goods  valued  at 13,004,400,143 

Total  production $18,540,345,312 

Twelfth  Census  of  the  United  States,  see  Special  Reports. 


CAUSE  OF  CIVILIZATION  AND  DECAY   235 

a  year  is  taken  in  rent,  consumption  taxes,  and 
monopoly  charges.  This  estimate  is  conservative. 
I  am  convinced  that  the  tribute  thus  exacted  is 
not  far  from  one-third  of  all  of  the  wealth  produced. 
It  is  probably  in  the  neighborhood  of  an  average  of 
$400.00  per  family. 

But  the  wage-worker  does  not  receive  anything 
like  his  per  capita  proportion  of  the  wealth  pro- 
duced. The  average  wage  is  below  $450.00  a  year. 
The  census  estimate,  as  we  have  seen,  is  but  $432.40. 
Yet  the  part  of  the  wage-earner's  income  appropri- 
ated by  privilege  is  undoubtedly  in  excess  of  one- 
third  of  his  income.  This  is  the  cost,  to  those  who 
toil,  of  the  private  ownerships  of  the  land,  and  the 
control  of  the  government  by  an  economic  class. 

So  long  as  these  conditions  continue  the  poor 
must  become  poorer,  just  as  those  who  own  the 
land  and  the  resources  and  the  public  service  cor- 
porations must  of  necessity  grow  richer.  The 
growth  of  population  insures  this.  Already  millions 
are  in  poverty,  while  a  score  of  millions  have  noth- 
ing save  the  morrow's  wage  between  them  and  des- 
titution. And  with  each  passing  day  those  on  the 
dead-line  of  poverty  must  increase  in  number. 
From  now  on  the  standard  of  living  of  those  who 
have  nothing  but  their  labor  to  sell  must  of  necessity 
fall.  To-morrow  the  purchasing  power  of  wages 
will  be  less  than  it  is  to-day.  So  will  the  chance 
of  employment.    This  is  the  inevitable  result  when 


236  PRIVILEGE  AND  DEMOCRACY 

the  land  and  the  highways  and  the  poHtics  of  a 
people  are  in  the  hands  of  an  ascendant  class.  By 
a  perfectly  logical  process,  those  who  own  the  land 
will  take  all  that  the  tax-gatherer  does  not.  The 
landlord  is  the  residual  claimant  of  all  that  is 
produced. 

That  this  is  true  is  evidenced  by  the  incomplete 
statistical  data  which  we  possess.  Wages  should 
have  increased  in  recent  years,  but  as  we  have  seen 
they  were  actually  lower  by  seven  per  cent,  in  1900 
than  they  were  in  1890,  while  the  cost  of  living  had 
materially  increased.^  At  the  same  time  the  earn- 
ings of  one  class  and  one  class  alone  have  increased. 
Rent  increased  52.43  per  cent,  in  Massachusetts  in 
five  years'  time.^  It  is  rapidly  advancing  all  over 
the  country.  Railway  gross  earnings  doubled  in 
ten  years,  while  the  dividends  of  mine  and  fran- 
chise corporations  have  shown  a  similar  advance. 
These  are  the  privileged  interests.  Their  earnings 
alone  respond  to  the  growth  of  population.  All 
other  classes,  even  the  competitive  capitalist,  suffer 
by  reason  of  it. 

Among  the  unprivileged  ones  competition  plays 
and  plays  fiercely.  There  is  free  trade  among  the 
producing  classes.  The  tariff  laws  do  not  extend  to 
those  who  toil.  The  doctrine  of  laissez  faire  is  but 
slightly  relieved  by  the  trades-union.     A  million 

» See  chap.  XV,  "  The  Future  of  Labor." 
2  Idem. 


CAUSE  OF  CIVILIZATION  AND  DECAY    237 

incoming  immigrants  each  year  render  the  struggle 
that  much  the  more  remorseless.  They,  too,  find 
the  resources  of  the  country  appropriated,  the  land 
enclosed.  They,  too,  are  imprisoned  by  privilege, 
the  privilege  of  those  who  own  and  the  privilege  of 
unjust  taxation.  The  millions  added  by  the  birth 
rate  make  the  struggle  that  much  more  hopeless, 
just  as  they  make  the  tribute  which  privilege  exacts 
that  much  the  heavier. 

Only  the  wage-earner  and  the  farmer,  the  retail 
dealer  and  the  unprotected  manufacturer  remain  to 
give  reality  to  the  teachings  of  political  economy. 
For  it  is  only  among  these  classes  that  competition 
plays. 

To  this  burden  of  rent  and  of  indirect  taxes  must 
be  added  another  and  an  even  more  important  ele- 
ment in  determining  the  well-being  of  a  people. 
Rent  and  taxation  control  the  standard  of  living 
through  distribution.  But  production  is  likewise 
strangled  in  the  process,  through  the  speculative 
withholding  of  the  land  and  resources  from  use. 
This  is  the  costliest  burden  of  all.  Labor  could 
carry  the  burden  of  rent,  it  could  carry  the  burdens 
of  indirect  taxation,  were  it  free  to  employ  itself 
where  opportunity  called  or  instinct  suggested. 
But  the  private  ownership  of  the  land  stifles  talent, 
it  limits  capital  no  less  than  labor  to  the  work  which 
is  nearest  at  hand.  Not  agriculture,  not  mining, 
not  the  elementary  processes  of  production  alone, 


238  PRIVILEGE  AND  DEMOCRACY 

would  be  awakened  by  the  freeing  of  the  land  from 
the  hand  of  the  speculator,  but  numberless  other 
industries  would  come  into  life  by  the  opening  up  of 
the  resources  of  nature  to  be  used  by  those  who 
are  most  fitted  to  occupy  them. 

The  cost  of  the  processes  which  have  been  enu- 
merated are  the  costs  of  poverty  wherever  it  ap- 
pears. Poverty  means  destitution,  sickness,  lack  of 
education.  It  means  undernourishment  for  the 
worker  and  his  offspring.  Poverty  breeds  vice  and 
crime.  Nine-tenths  of  the  crime  of  the  community 
is  traceable  directly  or  indirectly  to  industrial 
causes.  It  is  social.  It  is  from  the  poor  of  the 
community  that  the  tramp  and  the  vagrant  are 
recruited,  it  is  from  this  class  that  the  workhouse  is 
replenished.  Poverty  fills  the  streets  with  unfort- 
unate women,  the  most  pitiful  wreckage  of  the  city. 
It  is  poverty  that  breeds  the  criminal  of  to-morrow 
from  the  boys  and  girls  on  the  streets  to-day.  They 
enter  the  sweat-shop  and  the  department  store 
while  yet  in  tender  years.  They  do  not  receive  a 
living  wage.  They  are  worked  to  exhaustion.  They 
are  driven  to  the  streets  by  hunger  itself.  They 
gladly  accept  the  alternative  of  '^a  short  life  and  a 
merry  one"  in  exchange  for  all  that  hope  holds  out 
for  them.  Thus  poverty  is  the  mother  of  vice,  of 
crime,  of  prostitution.  And  this  wreckage  is  of  our 
own  making. 

And  it  is  apparent  that  the  tide  of  poverty  is  con- 


CAUSE  OF  CIVILIZATION  AND  DECAY    239 

stantly  rising.  It  engulfs  one  class  after  another. 
From  the  unskilled  it  passes  on  to  the  skilled 
laborer.  From  him  it  extends  to  the  clerk  and  the 
small  shopkeeper.  In  time,  it  laps  at  the  feet  of 
those  who  have  heretofore  enjoyed  comparative 
security.  Under  existing  conditions  the  tide  of 
poverty  can^iot  recede.  It  never  will  recede  until 
the  nation  itself  begins  to  ebb.  For  the  line  of 
poverty  creeps  up  with  the  line  of  rent,  slowly 
reducing  the  standard  of  living  of  all  classes  save 
those  who  own  the  land. 

It  is  at  this  point  that  a  nation  begins  to  decay. 
A  people  without  hope  is  a  people  without  initiative. 
Ambition  lives  only  with  opportunity.  Education, 
art,  skill,  literature,  invention,  are  all  postulated  on 
economic  well-being.  The  arts  cannot  live  where 
the  worker  is  compelled  to  struggle  for  the  barest 
necessities  of  life.  Political  liberty  itself  is  but  a 
reflection  of  the  economic  foundations  of  a  people. 
The  same  is  true  of  industry.  Culture  and  civiliza- 
tion mirror  the  industrial  freedom  or  servitude  of 
a  nation.  Men  must  be  economically  free  before 
they  can  be  much  else.  And  this  is  impossible  where 
the  right  to  work  is  as  hazardous,  and  the  returns  of 
the  worker  are  as  insignificant,  as  they  are  to-day. 

Even  industry  is  threatened  by  these  conditions. 
The  recent  hard  times  were  due  to  land  speculation 
and  the  growth  of  rent.  For  capital  is  dependent 
upon   the   well-being  of  tne   working   classes.    A 


240  PRIVILEGE  AND  DEMOCRACY 

people  cannot  buy  if  they  are  compelled  to  pay  all 
that  they  produce  for  the  mere  right  to  be  upon 
the  earth.  That  is  the  condition  of  the  tenement 
dwellers  of  our  cities.  It  is  the  condition  of  the 
workers  in  the  mines.  It  is  rapidly  becoming  the 
condition  of  the  agricultural  worker  as  well.  They 
are  too  poor  to  provide  a  market  for  industry. 
Ultimately  the  landlord  will  impoverish  the  capi- 
talist class  as  well  as  the  worker. 

I  am  convinced  that,  under  existing  conditions, 
progressive  industrial  and  social  decay  is  a  matter 
of  a  relatively  short  time.  Just  as  a  single  loaf  of 
bread  commands  everything  save  life  itself  between 
two  starving  men,  so  land,  even  in  a  nation  like  our 
own,  will  command  famine  prices  as  soon  as  it  is 
all  appropriated.  It  may  be  a  generation  before  we 
face  the  problem  in  all  its  acuteness,  but  there 
is  every  indication  that  the  burden  of  rent  and  the 
monopoly  of  the  land  have  already  started  America 
on  a  downward  path,  not  unlike  that  which  older 
nations  have  followed.  That  science  does  not 
accept  this  explanation  of  social  conditions,  is  no 
more  remarkable  than  the  refusal  of  the  Church  to 
accept  the  evolutionary  h3^otheses  of  Darwin  and 
of  Spencer:  it  is  no  more  remarkable  than  the 
refusal  of  the  plantation  owners  of  the  South  to  be 
convinced  of  the  wrongness  of  human  slavery;  or 
of  the  protected  industries  to  see  the  costly  con- 
fusion of  the  tariff.    All  of  the  traditions  of  political 


CAUSE  OF  CIVILIZATION  AND  DECAY    241 

economy  are  founded  upon  the  idea  of  private 
ownership  of  the  land.  As  a  science,  it  assumed 
form  and  shape  in  the  land  of  all  others  where  the 
land-owning  classes  are  most  dominant.  More- 
over, political  science  as  well  as  jurisprudence  is 
the  heritage  of  twenty  centuries  of  control  by  the 
landed  classes.  Added  to  these  influences,  all  of 
the  traditions  of  America  are  those  of  an  immense 
and  inexhaustible  public  domain,  of  free  land  in 
abundance  to  any  one  who  wanted  it.  Woven  in 
and  out  of  the  teachings  and  thought  of  the  people 
is  the  idea  that  the  private  ownership  of  the  land  is 
sanctioned  by  the  laws  of  nature  if  not  of  God. 
With  these  burdens  of  tradition,  of  class  interest,  of 
jurisprudence,  and  of  ignorance,  it  is  no  wonder 
that  political  economy  has  been  slow  to  challenge 
the  idea  of  the  private  ownership  of  the  land,  or 
statesmen  or  political  scientists  to  question  its 
propriety. 

Yet  the  experience  of  all  history  confirms  this 
interpretation,  an  interpretation  which  is  as  re- 
morseless in  its  logic  as  any  proposition  of  Euclid. 
The  effects  of  land  monopoly,  of  the  struggle  of  the 
people  for  its  use,  these,  together  with  the  effects  of 
the  rule  of  a  class  upon  the  destinies  of  a  people, 
are  to  be  seen  in  the  history  of  all  nations  from  the 
first  recognition  of  private  property  in  land.  The 
right  has  been  challenged  by  many  thinkers,  by 
social  reformers   and   agitators   in   every  age.    It 


242  PRIVILEGE  AND  DEMOCRACY 

is  only  in  the  present  generation  that  universal 
suffrage,  a  free  press,  and  representative  govern- 
ment have  made  the  challenge  audible.  Two  re- 
cent French  writers,  examining  the  history  of  the 
Hebrew,  Greek,  and  Roman  peoples,  say: 

*'A  regime  where  there  is  no  limit  to  the  extension 
of  individual  property,  no  tempering  of  its  enjoy- 
ment, no  responsibility  in  its  exercise,  where  interest 
and  taxes  take  from  labor  the  best  of  its  produce, 
excludes  the  majority  from  the  owning  of  any  prop- 
erty. Then  classes  form.  Their  division  becomes 
more  marked,  struggles  break  out,  the  invader 
arrives,  and  the  nation  is  destroyed.  This  is  the 
history  of  the  republics  of  Greece,  Carthage,  and 
Rome.  One  people  alone  continues  through  all 
antiquity — the  Hebrew  people.  It  resists  all  time, 
survives  even  migration  as  a  people.  According 
to  the  Mosaic  law,  everything  here  below  belongs 
to  the  Lord  and  man  is  but  the  user,  obliged  to 
conform  to  the  conditions  fixed  by  the  divine  order; 
conditions  which  have  for  their  aim  the  assurance 
of  the  union  of  the  land  and  the  family,  and  to 
preserve  to  the  needy  a  legitimate  part  of  the  re- 
sources of  the  earth."  ^ 

'  La  Question  Agraire,  by  Meyer  and  Ardent,  p.  12. 


CHAPTER  XX 
THE  ECONOMIC  FOUNDATIONS  OF  MORALS 

Just  as  the  politics  of  a  country  reflect  the  inter- 
ests of  an  ascendant  economic  class,  so  the  ideas 
of  right  and  wrong  of  any  age  mirror  the  will  of 
the  same  economic  ascendancy.  Ethics,  the  cur- 
rent sense  of  morality,  even  the  criminal  laws  are 
made  to  serve  a  class.  So  too  the  agencies  of  public 
opinion  are  enlisted  in  its  service.  The  press  is 
largely  owned  by  the  privileged  interests.  News 
and  publicity  bureaus  are  organized  and  con- 
sciously employed  for  the  purpose  of  moulding  pub- 
lic opinion,  while  the  press  that  is  free  is  colored 
by  the  same  influences.  Even  the  universities, 
both  those  that  are  privately  endowed  as  well  as 
those  that  are  supported  by  the  state,  the  institu- 
tions for  scientific  research  as  well  as  the  Church, 
the  philanthropic  agencies,  and  the  learned  pro- 
fessions, are  all  dependent  upon  those  who  have 
favors  to  grant.  They  are  unconsciously  coerced 
into  an  alliance  with  the  economic  interests  that 
are  dominant,  just  as  they  were  in  the  days  of 
feudalism,  when  the  learned  professions,  the  bench, 
the  bar  the  Church,  and  the  universities,  were  the 

24^ 


244  PRIVILEGE  AND  DEMOCRACY 

servitors  of  the  ruling  aristocracy.  It  is  these 
agencies  which  make  the  morals  and  the  public 
opinion  of  an  age. 

That  the  morality  of  an  age  is  moulded  by  the 
interests  of  the  ascendant  class  has  frequently  been 
remarked  by  those  who  were  not  socialists. 

'^Whenever  there  is  an  ascendant  class,"  says 
John  Stuart  Mill,  "a  large  portion  of  the  morality 
of  that  country  emanates  from  its  class  interests 
and  its  feelings  of  class  superiority.  The  morality 
between  Spartans  and  Helots,  between  planters  and 
negroes,  between  princes  and  subjects,  between 
nobles  and  roturiers,  between  men  and  women  has 
been,  for  the  most  part,  the  creation  of  these  class 
interests  and  feelings."  ^ 

And  the  ideas  of  right  and  wrong  in  America  are 
essentially  the  ideals  of  the  privileged  class.  The 
current  conceptions  of  liberty  and  of  duty,  of  obedi- 
ence and  of  reverence,  of  submission  and  content- 
ment have  been  implanted  in  our  minds  by  these 
influences.  So  are  our  ideas  of  crime.  It  is  not  so 
much  that  the  rich  offender  is  not  as  rigorously 
prosecuted  as  are  the  poor  for  the  same  offence. 
It  is  the  absence  of  a  moral  code  or  penal  statutes 
directed  against  the  offences  of  the  ascendant  class 
that  stamps  the  ethics  of  to-day  as  class  ethics. 
We  can  see  this  in  the  criminal  codes  of  our  states. 
Crimes  against  property  are  relatively  more  serious 

'  Essay  on  "  Liberty. " 


ECONOMIC  FOUNDATIONS  OF  MORALS  245 

than  crimes  against  the  person,  while  crimes  against 
the  state,  and  especially  crimes  against  society,  are 
scarcely  provided  for  at  all.  Thus  the  criminal 
code  of  New  York  provides  a  maximum  sentence  of 
ten  years'  imprisonment  for  criminal  assault  with 
intent  to  kill  or  commit  a  felony,  and  a  minimum 
sentence  of  ten  years'  imprisonment  for  first  degree 
burglary.  The  minimum  punishment  for  rape  and 
for  manslaughter  in  the  first  degree  is  twenty  years' 
imprisonment,  while  for  arson  it  is  forty  years' 
imprisonment.  The  abandonment  of  a  child  under 
six  years  of  age  is  punishable  by  a  maximum  sen- 
tence of  seven  years'  imprisonment,  while  the  sale 
of  impure  food,  even  though  it  may  poison  a  whole 
community,  is  only  a  misdemeanor,  and  the  viola- 
tion of  laws  for  the  protection  of  railway  workers 
from  death  and  accident  is  punishable  only  by  a 
fine  of  $500. 

The  offences  of  the  ascendant  class  against  those 
who  are  dependent  upon  them,  or  for  a  breach  of 
trust  to  the  many,  are  but  mildly  punished.  Cer- 
tain kinds  of  fraud  by  the  directors  and  officers  of 
a  bank  by  which  thousands  of  depositors  may  be 
robbed  of  their  savings  are  punishable  by  imprison- 
ment for  but  one  year  and  a  fine  of  $500,  or  both; 
while  a  corporation  which  commits  an  offence  which 
would  be  a  felony  were  it  committed  by  an  indi- 
vidual may  only  be  fined,  and  then  not  in  excess  of 
$5,000. 


246  PRIVILEGE  AND  DEMOCRACY 

The  same  class  instinct  characterizes  the  Federal 
law.  Bribery  of  a  member  of  Congress  is  punish- 
able by  three  years'  imprisonment;  while  the 
counterfeiter  of  a  coin  may  be  sentenced  to  ten 
years  of  hard  labor.  Moonshine  or  illicit  distilling 
by  the  poor  whites  of  the  South  to  defraud  the 
revenue  is  ruthlessly  pursued;  while  smuggling, 
which  is  an  ofTence  of  the  richer  class,  and  for  the 
same  motive,  is  practically  ignored.  All  of  the 
power  of  the  National  Government  is  turned  against 
him  who  rifles  a  mail-bag;  while  he  who  rifles  a 
nation  of  a  million-acre  estate  is  unmolested  in  his 
theft,  and  even  more  rarely  punished  for  it. 

When  it  comes  to  the  administration  of  the  law, 
the  disproportion  is  even  more  conspicuous.  Our 
penal  institutions  are  filled  with  minor  offenders 
who,  in  the  great  majority  of  instances,  have  been 
driven  to  the  commission  of  some  petty  offence 
by  industrial  conditions  over  which  they  have  no 
control.  In  the  police  courts  of  our  cities  men 
and  women  are  committed  to  the  workhouse  at  the 
rate  of  a  score  every  hour,  and  are  started  on  a 
career  of  vice  and  crime  which  destroys  every 
chance  of  recovery,  and  in  many  instances  leads 
inevitably  to  the  penitentiary. 

The  corrupt  alderman  who  accepts  a  bribe  is 
shunned  by  all  men,  and  his  prosecution  is  vigor- 
ously supported  by  public  opinion  and  reform  or- 
ganizations, while  he  who  gives  the  bribe  is  often 


ECONOMIC  FOUNDATIONS  OF  MORALS  247 

feted  by  his  associates,  and  the  prosecuting  attorney 
who  would  indict  him  as  a  criminal  is  treated  as  a 
social  pariah/  While  he  who  innocently  buys  a 
stolen  horse  gets  no  better  title  than  the  thief, 
he  who  knowingly  buys  a  stolen  franchise  is  pro- 
tected by  the  courts  in  his  grant.  Jacob  Sharp 
and  his  associates  were  sent  to  Sing  Sing  for  cor- 
rupt connection  with  the  Broadway  Street  Railway 
franchise  in  New  York;  but  the  franchise  itself  was 
upheld,  even  though  the  title  was  known  to  be 
tainted  with  fraud. 

The  same  class  ethics  appear  in  the  proceedings 
against  the  railways  and  industrial  combinations, 
and  the  land  and  timber  thieves  of  the  West. 
These  offences  involve  hundreds  of  millions  of  dol- 
lars. They  are  knowingly  committed  against  a 
sovereign  state.  Their  number  runs  into  the  tens 
of  thousands.  Yet  there  have  been  rare  imprison- 
ments of  the  offenders,  and  but  few  fines  collected. 
Anti-trust  laws  and  laws  against  rebates  and  dis- 
criminations are  still  openly  ignored.  The  orders 
of  the  Interstate  Commerce  Commission  are  con- 
temptuously violated,  while  mine  operators  and 
manufacturers  refuse  to  obey  the  laws  for  the  pro- 
tection of  their  employees.^ 

'  For  examples  of  evidence  of  this  class-conscious  morality  see  the 
contemporary  accounts  of  the  graft  prosecutions  in  St.  Louis  and  San 
Francisco  and  the  attitude  of  the  press  and  public  opinion  toward 
Folk  and  Heney. 

2  Within  the  last  year  the  case  of  the  United  States  against  the 
Standard  Oil  Company  for  violation  of  the  statutes  directed  against 


248  PRIVILEGE  AND  DEMOCRACY 

It  is  not  alone  that  these  offences  are  committed. 
It  is  the  acquiescence  on  the  part  of  the  public  in 
their  commission  that  stamps  the  ethics  of  the  day 
as  those  of  a  class.  We  do  not  protest  against  the 
crimes  of  the  business  world,  certainly  not  as  we 
protest  against  the  offences  of  organized  labor  or 
of  those  who  violate  the  excise  laws  of  the  state. 
The  offences  of  the  former  do  not  fall  within  the 
present  day  ethical  code,  neither  do  they  violate  the 
public  opinion  which  makes  that  code.  But  the 
same  public  opinion  rings  with  outraged  morality 
at  the  action  of  the  Western  Federation  of  Miners, 
the  boycott  of  an  ''unfair"  house,  or  the  criticism 
of  a  decision  of  the  courts  by  the  representatives  of 
organized  labor.  It  is  aroused  to  frenzy  over  the 
tyranny  of  the  closed  shop,  but  not  over  the  tyran- 
nies of  the  closed  corporation. 

It  demands  as  a  sacred  and  inviolable  right  the 
freedom  of  the  non-union  man  to  work  where  he 
will,  irrespective  of  organized  labor,  but  denies  in 
the  same  breath  the  sacred  and  inviolable  right  of 
the  same  man  to  buy  or  sell  in  the  markets  of  the 
world  irrespective  of  organized  capital,  unionized 
by  the  tariff.  Privilege  compares  the  dilatory 
criminal  proceedings  of  the  American  courts  with 
the  expeditious  punishment  of  offenders  in  England, 

rebates  was  dismissed  by  the  courts,  while  the  officers  of  the  Ameri- 
can Federation  of  Labor  were  committed  to  jail  for  alleged  violation 
of  a  court  order. 


ECONOMIC  FOUNDATIONS  OF  MORALS    249 

but  makes  no  reference  to  the  prolonged  delay  in 
the  payment  of  franchise  taxes  by  the  corporations 
of  New  York  city  or  the  litigation  over  the  eighty- 
cent  gas  legislation  in  that  state.  It  is  silent  about 
the  endless  litigation  over  every  petty  order  of  the 
Interstate  Cotnmerce  Commission,  the  statutes  of 
our  states,  or  the  exhausting  policy  adopted  to 
resist  the  payment  of  personal  injury  claims  by  the 
corporations.  It  identifies  itself  with  agitation  to 
close  the  saloon  and  to  punish  petty  vice,  but 
betrays  no  interest  in  any  movement  to  discover 
the  cause  of  these  evils  or  to  control  the  privileged 
interests  which  lie  back  of  their  existence. 

How,  it  may  be  asked,  does  all  this  accord  with 
the  recent  acti\ity  of  the  state  and  the  nation 
against  the  big  business  interests?  As  a  matter  of 
fact,  there  comes  a  time  in  the  evolution  of  class 
morality  when  the  very  excesses  of  the  dominant 
class  must  be  checked  in  order  to  preserve  the  class. 
And  an  examination  of  the  recent  legislation  against 
corporate  abuses  will  show  that  it  is  designed  for  the 
protection  of  the  ascendant  class  rather  than  the 
destruction  of  its  privileges.  The  worst  offenders 
must  be  held  in  check.  Monopoly  must  be  regu- 
lated or  it  will  be  destroyed;  the  railways  must 
abandon  discrimination  if  they  would  check  the 
movement  for  government  ownership.  The  more 
far-sighted  owners  of  the  franchise  corporations  have 
approved  of  the  creation  of  state  commissions  for 


250  PRIVILEGE  AND  DEMOCRACY 

the  same  purpose,  just  as  the  brewers  and  distillers 
have  drafted  model  license  laws  to  check  the  move- 
ment for  prohibition.  Such  restrictive  legislation 
is  designed  to  save  the  institution,  by  the  creation 
of  a  legal  code  which  will  restrain  the  irresponsi- 
ble offender.  By  these  means  the  public  will  be 
diverted  from  the  fact  that  the  institution  itself  is 
wrong,  to  the  idea  that  it  is  the  occasional  offender 
who  is  at  fault. 

The  same  sinister  influence  exercises  its  power 
over  the  agencies  of  public  opinion.  It  tempers 
the  pulpit  and  the  university.  It  limits  discussion 
to  other  than  vital  questions.  The  abuses  of  the 
business  world,  and  the  wrongs  of  humanity,  are 
excluded  from  investigation.  Preferment  is  closed 
to  those  who  look  too  closely  into  the  cause  of 
existing  conditions.  The  daily  press  is  even  more 
openly  controlled.  Editorial  discussion  is  for  the 
most  part  commonplace,  while  the  news  columns 
are  made  to  mirror  the  will  of  the  counting-room. 
News  and  telegraphic  agencies  are  controlled  with 
the  same  end  in  view,  while  at  Washington  and  in 
the  capitals  of  our  states  subsidized  news  and  plate- 
matter  bureaus  are  maintained  which  feed  the 
rural  papers  with  matter  favorable  to  the  interests 
which  support  them. 

The  metropolitan  press  as  well  as  that  of  the 
larger  inland  cities  is  largely  owned  by  the  franchise 
corporations  or  other  interests,  or  is  subjected  to 


ECONOMIC  FOUNDATIONS  OF  MORALS    251 

such  pressure  through  its  advertising  patrons  that 
it  is  muzzled.  This  fact  is  admitted  by  many 
editors  who  deplore  it.  The  Philadelphia  North 
American  asserts  that  the  press  of  America  is  no 
longer  to  be  trusted.    It  says: 

''The  influence  for  real,  patriotic,  right  thinking 
exerted  by  the  daily  newspapers  of  America  was 
dwindling  almost  to  the  degree  of  degeneracy. 
.  .  .  The  world's  strongest  people  are  sinking 
into  subserviency  to  a  sordid  power,  only  because 
the  people  were  being  served  by  a  press  that  was 
worse  than  subsidized,  a  press  that  had  become 
enslaved.  .  .  .  The  predatory  interests  were  not 
slow  to  estimate  how  easily  they  could  control 
certain  newspapers  by  the  granting  or  the  with- 
drawal of  profits.  From  the  allotment  of  official 
printing  in  the  cities  to  the  appointment  of  an  able 
and,  therefore,  a  dangerous  man  in  the  town  to  be 
pastmaster,  by  grace,  of  a  corrupt  state  machine, 
the  system  has  been  the  same. 

''Debauchery  has  come  from  many  an  angle. 
The  same  bankers,  suppliant  to  Wall  Street,  are  the 
ones  from  whom  favors  were  asked  by  newspaper 
managers,  cramped  financially,  to  keep  pace  with 
modern  development.  Volumes  instead  of  brief 
comment  could  be  written  concerning  pressure 
brought  to  bear  by  railroads,  the  liquor  traffic,  the 
poisoners  of  food  and  medicines,  the  promoters  of 
swindling  mining  and  other  stock  schemes. 

"But  two  things  above  all  others  stand  out  as 
factors  in  the  lessening  of  the  influence  of  the  daily 
press:  The  first  is  the  purchase  of  newspapers  by 
rich  men  utterly  destitute  of  any  comprehension  of 
the  right  function  of  journalism.    Jay  Gould  failed 


252  PRIVILEGE  AND  DEMOCRACY 

in  his  attempt  at  this  sort  of  prostitution  of  pubHc 
opinion.  From  Huntingdon  in  CaUfornia,  to  Mor- 
gan and  Behnont  in  New  York,  and  from  'Fingy' 
Connors  in  Buffalo,  to  Ohver  in  Pittsburg,  we  have 
only  too  many  proofs  that  the  plan  now  succeeds." 

It  is  by  ownership,  by  advertising  coercion,  by 
the  distribution  of  official  printing,  by  the  control 
of  the  news  agencies,  but  most  of  all  by  the  coercive 
power  of  the  banks,  to  which  the  newspaper  of  the 
day  must  go,  that  the  making  of  news  as  well  as 
the  public  opinion  which  emanates  from  the  press 
has  passed  into  the  hands  of  the  predatory  class. 
They  not  only  make  or  mar  the  career  of  political 
leaders  who  are  inimical  to  privilege,  they  distort 
and  color  the  facts  which  take  place.  As  the  North 
American  sa5^s,  when  the  newspaper  ceased  to  be 
an  agency  of  enlightened  public  opinion  a  new 
agency  arose  to  take  its  place.  The  weekly  and 
monthly  magazine  has  become  the  tribune  of  fear- 
less speech. 

And  just  as  the  economic  interests  of  the  ascendant 
class  mould  the  ethics  of  an  age,  so  the  same  economic 
interests  mould  our  outlook  on  the  past.  History 
is  written  by  men  from  the  same  class  which  makes 
the  public  opinion  of  to-day.  Their  standards  of 
right  and  wrong  are  those  of  the  class  to  which  they 
belong.  It  is  for  this  reason  that  history  is  blind, 
just  as  are  the  law  and  contemporary  opinion,  to  the 
crimes   which   have   been   committed   against   hu- 


ECONOMIC  FOUNDATIONS  OF  MORALS    253 

manity.  The  eye  of  research  is  closed  to  the  great 
social  forces  which  underlie  the  decay  of  nations  and 
the  destruction  of  liberty  by  the  aggressions  of  the 
privileged  orders.  We  read  the  chronicles  of  Greece, 
of  Rome,  of  Spain,  or  of  Great  Britain  almost  in  vain 
for  any  guidance  in  the  solution  of  the  menacing 
problems  which  confront  the  twentieth  century. 
Like  the  science  of  political  economy,  history  stops 
short  at  the  interpretation  of  social  movements. 
The  science  of  history  awaits  some  great  mind  like 
that  of  Darwin  to  construct  from  out  the  neglected 
records  of  the  past  the  evolution  of  the  economic 
foundations  of  society.  When  that  has  been  done  we 
shall  see  that  the  great  crimes  of  history,  like  those 
of  the  present  day,  are  not  those  upon  which  the 
historian  dwells.  The  great  crimes  across  the  face 
of  Christendom  are  those  which  have  enjoyed  every 
sanction  which  the  law  could  give.  They  were 
environed,  just  as  they  are  to-day,  with  every  ap- 
proval which  respect  could  add.  They  were  achieved 
so  quietly  that  the  voice  of  protest  was  stilled.  Yet 
the  effects  of  these  crimes  linger  on  from  generation 
to  generation,  even  from  century  to  century. 

When  we  see  history  in  its  real  perspective,  it  will 
be  apparent  that  the  great  crimes  of  every  age  have 
been  committed  through  legislation.  They  will  be 
found  carefully  written  upon  the  statute  books  of 
the  age.  They  are  the  crimes  of  an  ascendant  class 
in  control  of  the  government,  making  use  of  that 


254  PRIVILEGE  AND  DEMOCRACY 

control  for  the  impoverishment  of  their  peoples. 
When  history  is  so  written,  we  shall  see  that  the  ser- 
vitude, the  poverty,  the  famines,  and  the  ruthless 
destruction  of  peoples  is  the  product  of  law.  We 
need  not  go  back  to  the  Roman  senate,  to  the 
privileged  orders  in  France,  to  the  crimes  against 
Ireland  by  the  landlords  of  England,  for  proof  of 
this  statement.  Confirmation  may  be  found  in  the 
law-made  crimes  of  America,  as  well  as  of  Europe, 
to-day.  For  law  is  the  handmaiden  of  absolutism 
just  as  it  is  of  freedom,  of  endless  wars  as  well  as  of 
peace,  of  slavery  as  well  as  of  liberty,  of  decadence, 
as  well  as  of  splendor.  Through  privileges  created 
by  law  untold  millions  have  died  of  starvation. 
Through  privileges  created  by  law  untold  millions 
are  suffering  from  starvation  and  disease  in  America 
to-day.  Through  class-made  law  civilization  has 
been  set  back  centuries  in  its  growth,  while  liberty, 
the  liberty  that  involves  the  economic  as  well  as 
the  political  freedom  of  the  individual,  has  all  but 
disappeared  from  the  face  of  the  Western  world. 


CHAPTER  XXI 
THE  REMEDY  PROPOSED 

How  may  all  this  be  altered?  How  can  the  land 
be  opened  up  to  use  by  those  who  desire  it,  how 
can  monopoly  be  destroyed,  the  burden  of  rent  be 
reduced,  the  cost  of  living  be  brought  down,  and  the 
opportunities  for  labor  and  capital  increased?  |Iow 
can  the  gains  of  civilization  be  made  to  serve  all 
mankind  instead  of  a  diminishing  few?  How  can 
want  and  the  fear  of  want  be  abolished  from  the 
earth,  and  justice,  equality,  and  plenitude  be  in- 
sured to  all? 

There  are  two  and  only  two  solutions  of  the 
social  problem  which  confronts  the  civilized  world. 
One  is  industrial  socialism.  The  other  is  industrial 
freedom.  From  the  time  of  Plato  down  to  Karl 
Marx  men  have  dreamed  of  Utopias,  based  upon  a 
society  consciously  organized,  and  controlling  the 
agencies  of  production  and  distribution  for  the  com- 
mon welfare.  In  every  age,  too,  men  have  painted 
pictures  of  the  alternative  of  industrial  freedom; 
of  the  society  which  would  result  from  the  abolition 
of  class-made  laws  and  legalized  privilege.  The 
most  eminent  of  the  latter  were  the  French  philoso- 

255 


256  PRIVILEGE  AND  DEMOCRACY 

phers  of  the  eighteenth  century,  of  whom  Quesnay, 
Turgot,  Gournay,  and  the  elder  Mirabeau  were  the 
most  brilliant.  It  was  Henry  George,  however,  who 
discovered  the  means  by  which  industrial  liberty 
could  be  secured;  it  was  he  who  evolved  a  philosophy 
as  complete  as  socialism  itself.  It  is  this  alternative 
of  industrial  freedom  I  propose  to  consider. 

If  the  previous  analysis  of  the  economic  founda- 
tions of  America  no  less  than  of  Europe  is  correct, 
the  unjust  distribution  of  wealth,  the  misery  and 
much  of  the  vice  and  crime  of  to-day  are  the  products 
of  man-made  laws.  Organized  government  itself 
has  created  the  Frankenstein  monster  of  the  social 
problem.  And  if  these  evils  are  the  result  of  law, 
obviously  they  can  be  corrected  by  the  same  agency 
that  created  them.  They  can  be  corrected  by  free- 
dom. Nature  is  as  jealous  of  her  methods  as  she  is 
of  her  laws.  And  the  law  of  nature  is  the  law  of 
liberty. 

Liberty  involves  no  complicated  organization  of 
society,  no  bureaucracy,  no  increase  in  the  func- 
tions of  the  state.  Liberty  involves  rather  repeal; 
it  involves  the  abolition  of  the  privileges  which  have 
been  created  by  Congress,  the  state  legislatures,  and 
city  councils.  It  involves  the  freedom  to  buy  and 
sell  where  one  wills;  the  freedom  of  the  highways 
and  the  freedom  of  access  to  the  resources  of  nature. 
Freedom  involves  the  razing  of  all  tariff  walls,  and 
the  abolition  of  all  excise  and  internal  revenue  taxes 


THE  REINIEDY  PROPOSED  257 

on  trade,  industry,  and  commerce;  it  involves  the 
ownership  of  the  railways  and  the  means  of  trans- 
portation by  the  people,  and  the  abandonment  of  all 
taxes  on  labor  and  labor  products,  and  the  nation- 
alization of  the  land  through  taxation. 

This  is  the  philosophy  of  the  single  tax,  of  the 
taxation  of  land  values,  as  it  is  called  in  England, 
first  proposed  by  Henry  George.  He  did  not  lay 
claim  to  its  discovery.  He  found  it  in  the  writings 
of  the  French  physiocrats,  in  the  teachings  of 
Moses,  as  well  as  in  the  all  but  universal  experiences 
of  early  peoples. 

The  simplicity  of  this  proposal  delays  its  accept- 
ance. Yet  any  one  who  will  follow  the  forces  which 
would  be  released  by  such  legislation  will  acquire 
a  philosophy  of  life  as  adequate  as  that  of  socialism 
itself.  He  will  find  in  it  ajajw  of  perfect  justice  in 
human  society,  a  law  which  insures  to  the  worker 
to-day,  to-morrow,  and  forever,  equality  with  his 
fellows  and  an  assurance  of  the  full  product  of  his 
toil.  He  will  find  a  means  by  which  monopoly  will 
be  destroyed  and  industrial  liberty  re-established; 
he  will  discover  a  means  to  terminate  the  present 
unjust  distribution  of  wealth.  This  remedy,  too,  is 
sanctioned  by  all  that  science  teaches  us  of  the  laws 
of  evolution;  it  is  sanctioned  by  a  thousand  proofs 
of  history  and  contemporary  society,  as  well  as  by 
the  precepts  of  justice  and  Christianity.  It  is  a 
solution  that  relies  upon  the  known  instincts  of 


258  PRIVILEGE  AND  DEMOCRACY 

humanity,  and  accords  with  all  of  the  traditions 
of  American  democracy. 

In  a  quarter  of  a  century  the  taxation  of  land 
values  has  become  social  philosophy  to  millions  of 
men  in  every  corner  of  the  civilized  world.  It  is 
the  inspiration  of  the  political  movements  in  a 
dozen  states  and  cities,  and  in  a  limited  sense  is  the 
political  programme  of  the  Liberal  party  in  Great 
Britain.  It  is  a  philosophy  which  divides  the  world_ 
with  the  followers  of  Socialism,  and  in  its  final 
analysis  is  a  gospel  of  liberty  and  pure  democracy. 

The  remedy  which  is  here  proposed  is  open  to 
adoption  by  the  simplest  of  changes.  It  involves 
no  violent  alteration  in  the  machinery  of  government 
or  the  organization  of  the  state,  no  violent  break 
with  that  with  which  we  are  familiar,  no  departure 
from  the  traditions  of  the  functions  of  government, 
no  bureaucracy  or  centralized  control  over  the  life 
or  activity  of  the  individual.  There  would  be  no 
new  machinery;  rather  much  that  is  now  necessary 
would  become  obsolete.  There  would  be  an  end  of 
oaths,  of  jurats,  of  inquisition,  and  of  perjury  in 
taxation. 

This  philosophy  of  freedom  may  not  be  apparent 
at  a  glance.  It  does  not  appeal  to  the  imagination 
as  does  the  philosophy  of  socialism.  But  those  who 
will  apply  the  known  laws  of  evolution  to  social  and 
industrial  conditions  and  will  study  the  development 
of  society  in  every  new  country  where  access  to 


THE  REMEDY  PROPOSED  259 

the  land  is  open  to  all,  or  the  history  of  the  nations 
of  Europe  down  even  to  the  present  day,  will  find  in 
the  freedom  which  would  result  from  this  proposal 
a  social  philosophy  as  adequate  to  the  problems  of 
to-day  as  any  ever  offered  by  the  Utopian  dreams  of 
the  past. 

Under  this  proposal  the  state  would  become  the 
universal  rent  collector.  It  would  step  into  the 
shoes  of  the  ground  landlord.  There  would  be  no 
land  rent.  It  would  all  be  absorbed  in  taxes.  In 
other  words,  society  would  assume  what  society 
itself  had  created,  and  in  so  doing,  would  leave  free 
from  molestation  all  that  the  individual  created. 
There  would  be  no  other  taxes  and  there  would  be 
need  of  none. 

When  all  of  the  rent  was  so  appropriated  the 
land  would  be  socialized.  It  would  have  no  capital 
or  selling  value.    It  would  become  the  common 


property  of  the  nation,  subject  only  to  an  annual 
rental  charge.  With  this  established,  the  earth 
would  be  opened  up  to  use  by  all.  Then  opportunity 
would  call  from  every  quarter.  Then  the  demand 
for  labor  would  transcend  the  labor  supply,  and  the 
worker  would  be  able  to  command  the  full  product 
of  his  toil.  Then  society  would  be  free  from  the 
burdensome  taxes  on  consumption  and  exchange 
which  now  impoverish  it,  while  trade  and  commerce 
would  be  free  to  follow  their  natural  channels. 
Then  an  era   of  freedom  would  arise  the  like  of 


260  PRIVILEGE  AND  DEMOCRACY 

which  the  world  has  never  known,  a  freedom  in  which 
no  man  could  live  by  the  sweat  of  another's  face  and 
no  man  could  levy  tribute  on  his  neighbor  by  law. 
Then  there  would  be  equality  of  opportunity  for  all, 
an  equality  in  which  the  natural  instincts  of  man 
to  justice  and  righteousness  would  have  full  play. 
Then  from  each  according  to  his  privileges,  and  to 
each  according  to  his  labor,  would  be  the  rule  of  life. 

The  city  of  New  York  could  commence  this  reform 
in  all  its  essentials  by  a  law  of  but  few  sentences  in 
length.  It  could  socialize  a  large  part  of  its  three  and 
a  half  billions  of  land  values  by  the  abandonment 
of  all  taxes  now  assessed  against  houses,  buildings, 
improvements,  and  personal  property,  by  permitting 
the  whole  burden  of  local  taxation  to  fall  upon 
land  values.  All  of  the  machinery  for  carrying  this 
programme  into  execution  already  exists.  The  city 
now  assesses  its  land  at  its  full  value  and  it  assesses 
it  every  year.  It  separates  improvement  values  from 
land  values.  New  York  as  well  as  Boston  has  dem- 
onstrated that  land  can  be  valued  more  easily  and 
far  more  accurately  than  any  other  form  of  wealth.* 

With  the  tax  on  land  values  increased  by  the 

'  When  the  taxation  of  land  values  was  first  proposed  it  was  urged 
that  the  proposal  was  impractical,  because  it  was  impossible  to  value 
land  separately  from  improvements  or  to  ascertain  what  was  the 
unearned  increment.  A  dozen  states  and  cities  have  demonstrated 
that  land  can  be  easily  and  accurately  valued,  and  the  annual  reports 
of  the  assessing  officers  of  New  York  and  Boston  have  furnished 
startling  evidence  of  the  colossal  values  which  society  has  given  to  a 
few  of  its  members. 


THE  REMEDY  PROPOSED  261 

abandonment  of  other  taxes,  ground  rents  would 
fall.  So  would  the  value  of  the  land.  In  time  the 
$200,000,000  of  rent,  now  paid  to  a  handful  of 
owners,  would  be  paid  to  the  community  that  created 
it.  As  the  taxes  were  increased  the  value  of  the 
land  would  disappear.  Ultimately  it  would  become 
in  effect  the  property  of  the  city.  New  York  would 
be  the  richest  landlord  in  the  world.  By  this  simple 
process  it  would  have  socialized  one-half  of  the 
wealth  of  the  city. 

Into  its  treasury  there  would  flow  an  annjaal 
income  of  $250,000,000,  instead  of  $160,000,000  as 
it  is  to-day.  For  already  forty  per  cent,  of  the 
taxes  of  New  York,  or  about  $60,000,000,  are  taken 
from  rent.  From  out  this  increasing  treasure  a 
city  could  be  erected  whose  magnificence  would 
surpass  anything  the  world  has  known.  By  means 
of  it  the  city  could  operate,  without  cost  to  the 
consumer,  the  services  of  transit,  light,  heat,  and 
power,  the  owners  of  which  services  now  share  with 
the  owners  of  the  land  the  unearned  increment  of 
the  city.  The  city  could  develop  a  traction  policy 
and  distribute  its  population  far  out  into  the  country- 
side. A  conscious  housing  and  transportation  policy 
could  be  evolved,  as  far  in  advance  of  that  which 
private  monopoly  has  given  us  as  the  ocean  grey- 
hound is  in  advance  of  the  cattle-ship  or  the  auto- 
mobile is  superior  to  the  stage-coach.  Light,  heat, 
and  power  could  be  supplied  in  the  same  way,  at 


262  PRIVILEGE  AND  DEMOCRACY 

no  cost  at  all,  were  these  services  under  public  con- 
trol as  they  should  be.  For  these  are  the  arteries 
of  municipal  life.  They  are  as  essential  a  part  of 
the  public  body  as  the  nervous  system  is  a  part 
of  the  human  body.  Modern  city  life  is  impossible 
without  them.  They  can  only  be  properly  man- 
aged when  the  idea  of  private  profit  is  subordinate 
to  the  idea  of  service.  Even  to-day  public  admin- 
istration is  more  responsive  to  public  opinion  than 
private  administration.  In  time  the  common- 
wealth will  become  far  more  intelligent  than  pri- 
vate capital.  This  is  already  true  wherever  the 
interest  of  privilege  coincides  with  the  interest  of 
the  community.  This  superiority  is  apparent  in 
the  magnificent  docks  which  have  been  erected 
about  the  city  of  New  York,  as  well  as  in  the  splen- 
did school-houses  and  libraries  and  public  struct- 
ures which  adorn  the  metropolis.  It  is  apparent 
in  the  workmanship  of  river  and  harbor  improve- 
ments, in  the  construction  of  a  great  battle-ship,  or 
the  building  of  the  Panama  Canal  by  the  nation. 
Wherever  privilege  desires  efficiency  the  govern- 
ment is  efficient.  And  when  the  government  is  free 
from  the  corrupting  influence  of  big  business,  when 
it  turns  its  attention  to  the  conscious  aim  of  serving 
democracy,  we  shall  find  that  ability,  talent,  and 
genius  will  serve  the  state  far  more  ardently  than 
it  ever  served  for  private  hire. 
We  need  not  wait  for  evidence  of  the  fact.    It 


THE  REMEDY  PROPOSED  263 

may  be  seen  in  the  high  sense  of  honor  and  intelli- 
gence of  the  War  and  Navy  Departments,  as  well 
as  in  the  world  of  science,  where  men  labor  in  the 
service  of  truth  for  the  most  insignificant  pay  and 
for  scant  recognition.  We  see  it  in  our  universi- 
ties and  our  schools,  even  in  the  fire  departments 
of  our  cities,  where,  unnoticed  and  unrecorded,  men 
go  willingly  into  the  face  of  death  merely  for  the 
sake  of  protecting  another  man's  property. 

We  have  only  begun  to  make  use  of  government 
as  an  industrial  agency.  We  are  only  beginning  to 
see  that  private  property  must  be  subordinated  to 
humanity.  On  every  hand  it  is  apparent  that  the 
activities  of  the  government  must  be  increased  and 
that  they  can  be  used  for  the  service  of  the  many, 
just  as  they  are  now  used  for  the  service  of  the  few. 
Old  political  formulas  are  changing.  The  state  is 
rapidly  becoming  an  economic  as  well  as  a  political 
agency.  From  now  on  this  tendency  must  in- 
crease at  an  accelerated  pace.  And  the  services 
which  the  community  could  render  its  people,  from 
out  the  as  yet  untouched  common  treasure,  would 
of  themselves  relieve  the  most  serious  wants  of 
modern  society.  For  poverty  can  be  relieved  by 
increasing  the  free  services  of  society  as  easily  as 
privilege  can  be  created  by  the  passage  of  tariff 
laws,  by  railway  privileges,  and  franchise  grants. 
It  is  only  a  question  of  the  class  in  control  of  the 
government  and  the  motives  which  animate  it. 


CHAPTER  XXII 
THE  REMEDY  CONSIDERED 

This  then  is  the  proposal :  That  all  of  the  revenues 
of  the  government  shall  be  raised  from  a  tax  upon 
the  value  of  the  land;  that  all  other  forms  of  taxa- 
tion shall  be  abandoned;  that  trade,  industry,  and 
commerce  shall  be  free  from  any  interference  by  the 
state,  and  the  products  of  labor  shall  exchange  with 
each  other  without  let  or  hindrance  of  any  kind. 
Here  there  shall  be  but  one  tax,  and  that  shall  be 
levied  upon  the  value  of  the  land  which  society 
itself  has  created,  until  all  rent  shall  have  been 
taken  by  the  people  for  their  common  use  and  enjoy- 
ment. 

Let  us  examine  this  proposal.  Is  it  just?  This 
test  must  be  met  by  any  proposal  of  social  read- 
justment. For  injustice  can  only  be  corrected  by 
justice.  There  is,  of  course,  the  political  sanction  of 
salus  populi  suprema  est  lex.  Taxation  has  always 
been  used  to  promote  a  social  policy.  The  tariff 
and  excise  taxes  have  been  imposed  in  the  name  of 
national  well-being.  During  the  Civil  War  state 
bank-notes  were  taxed  out  of  existence  in  the  interest 
of  a  sounder  banking  policy.    We  have  no  hesita- 

264 


THE  REMEDY  CONSIDERED  265 

tion  in  destroying  millions  of  dollars  of  property, 
innocently  invested  in  the  brewery  and  distilling 
business,  in  the  name  of  social  well-being.  We  have 
discouraged  the  manufacture  and  sale  of  oleomarga- 
rine in  the  interest  of  a  class  and  at  the  expense 
of  those  who  consume.  And  the  taxation  of  land 
values  may  be  justified  by  the  same  sanction  of 
the  welfare  of  the  state.  Measured  by  the  standard 
of  conventional  political  justice  it  is  perfectly 
just. 

There  is,  however,  a  higher  sanction,  the  sanction 
of  absolute  justice.  And  absolute  justice  requires 
that  society  shall  protect  its  members  in  the  enjoy- 
ment of  that  which  they  produce.  That  is  the  first 
obligation  of  government.  But  no  such  protection 
is  offered  to  those  whose  labor  creates  the  increased 
land  values.  The  presence  of  each  one  of  us  upon 
the  earth  creates  a  value  which  is  appropriated  by 
another.  Each  individual  is  compelled  to  pay  trib- 
ute for  that  which  is  really  his  own. 

And  there  is  but  one  way  by  which  this  social 
value  can  be  retaken.  And  that  is  by  taxation. 
For  this  reason  the  taxation  of  land  values  is  the 
reverse  of  confiscation.  It  is  exact  justice.  It  re- 
turns to  society  that  which  society  produces,  and 
leaves  free  from  taxation  that  which  the  individual 
by  his  efforts  creates. 

This  then  is  the  natural  source  of  revenue,  as 
providentially  provided  as  the  manna  of  heaven 


266  PRIVILEGE  AND  DEMOCRACY 

was  provided  for  the  Hebrew  people.  It  exists  in 
abundance  for  every  social  need.  It  increases  with 
the  growing  needs  of  society  and  the  complexity  of 
modern  life. 

But  the  taxation  of  land  values  is  least  of  all  a 
financial  measure.  That  is  but  incidental  to  a 
larger  social  ideal.  It  is  not  the  revenues  society 
would  receive,  it  is  the  wealth  which  would  spring 
into  existence  and  its  just  distribution  that  is  impor- 
tant. We  could  well  afford  to  throw  all  of  the  rent 
of  the  land  into  the  sea  if  that  were  the  only  means 
by  which  industrial  freedom  could  be  secured.  For 
the  taxation  of  land  values  will  insure  freedom,  it 
will  create  a  society  in  which  the  production  of 
wealth  will  be  greatly  increased,  while  the  share  of 
each  will  be  justly  determined. 

Let  us  follow  the  effects  of  this  shifting  of  the 
whole  burdens  of  taxation  onto  land  values.  Its 
first  effect  would  be  to  discourage  land  speculation. 
The  owner  could  no  longer  sit  idly  on  his  holdings 
and  wait  for  society  to  make  them  valuable.  He 
would  have  to  put  the  land  to  its  most  productive 
use  or  sell  it  to  some  one  who  would.  There  would 
be  an  economic  motive  urging  production  rather 
than  idleness.  With  the  tax  increased  to  three, 
four,  or  five  per  cent,  this  pressure  would  be  in- 
creased. And  surely  society  owes  nothing  to  him 
who  merely  monopolizes  that  which  all  men  want 
and  which  all   men  must  have  to  live.    As  the 


THE  REMEDY  CONSIDERED  267 

present  Chancellor  of  the  Exchequer  of  England, 
Mr.  Lloyd  George,  said,  in  defence  of  the  land-tax 
clause  of  the  British  budget  introduced  in  1909: 
*'If  the  speculator  wants  to  remain  a  dog  in  the 
manger,  he  must  pay  for  his  manger." 

Under  such  a  pressure  land  would  be  forced  into 
the  market.  Owners  would  seek,  tenants,  occu- 
piers, workers.  Houses  would  be  erected  on  vacant 
building  sites.  Mines,  quarries,  and  plantations 
would  be  worked  to  their  capacities.  The  land 
would  invite  men  instead  of  repelling  them.  Op- 
portunity would  spring  up  on  every  hand. 

Land  values  would  fall  in  consequence.  The 
competition  of  sellers  would  bring  this  about.  In- 
stead of  men  competing  for  land,  the  land  would 
compete  for  men.  The  present  economic  interest 
of  the  speculator  would  be  reversed.  Another  influ- 
ence would  accelerate  the  movement.  A  tax  upon 
the  products  of  labor  increases  their  cost.  The  tax 
enters  into  the  price.  It  is  paid  by  the  consumer. 
A  tax  on  land  values,  on  the  other  hand,  reduces  the 
cost  of  land.  It  is  deducted  from  the  rent.  As 
rent  falls  so  does  the  price  of  land,  for  capital  value 
is  but  the  reflection  of  earning  power.  Economists 
are  agreed  that  a  tax  on  land  values  cannot  be 
shifted.  It  remains  where  it  falls.  It  diminishes 
rent.  ''A  tax  on  rent,"  says  Ricardo,  ''would  affect 
rent  only;  it  would  fall  wholly  on  landlords,  and 
could  not  be  shifted  to  any  class  of  consumers. 


268  PRIVILEGE  AND  DEMOCRACY 

The  landlord  could  not  raise  rent."  ^  John  Stuart 
Mill  testifies  to  the  same  thing.  He  says:  ''A  tax 
on  rent  falls  wholly  on  the  landlord.  There  are  no 
means  by  which  he  can  shift  the  burden  upon  any 
one  else.  ...  A  tax  on  rent,  therefore,  has  no 
effect  other  than  its  obvious  one.  It  merely  takes 
so  much  from  the  landlord  and  transfers  it  to  the 
state."  ^  A  tax  on  land  values  is  thus  unlike  any 
other  tax  save  those  imposed  on  incomes  and  in- 
heritances. It  remains  where  it  is  originally  placed. 
It  must  be  paid  by  the  owner.  The  state  becomes 
a  rent  collector.  To  the  extent  of  the  tax,  society 
shares  with  the  landlord  in  the  ownership  of  the  land. 

And  as  the  tax  increases,  rent  diminishes.  If  a 
piece  of  land  is  worth  $1,000  free  from  taxation  it  is 
because  it  produces  $50  rent.  If  a  tax  of  two  per 
cent,  is  imposed  on  the  capital  value,  the  state  then 
receives  $20  and  the  landlord  $30.  The  value  of 
the  land  would  be  reduced  to  $600  and  the  social- 
ized capital  value  appropriated  by  the  state  would 
amount  to  $400.  That  is  what  is  meant  by  the 
saying  that  'Hhe  selling  price  of  land  is  its  untaxed 
value."  Were  the  present  land  taxes  of  New  York 
city,  amounting  to  $60,000,000,  removed,  land  val- 
ues would  rise  by  $1,200,000,000  immediately. 

Ultimately,  with  the  tax  increased  to  the  amount 
of  the  rental,   land  values  would  vanish.    There 

'  Principles  of  Political  Economy,  chap.  10. 
2  Political  Economy,  book  5,  chap.  3. 


THE  REMEDY  CONSIDERED  269 

would  be  no  rent  left.  The  state  would  have  appro- 
priated it  all.  A  piece  of  land  on  Broadway  would 
theoretically  have  no  more  selling  value  than  a 
piece  of  land  in  Kansas.  It  would  pay  more  taxes. 
That  is  all.  People  would  have  to  pay  a  higher 
annual  tax  for  the  privilege  of  using  it. 

With  this  achieved,  the  landlord  would  cease  to  be 
a  factor  in  distribution.  His  share  would  then  go 
to  the  state.  Under  such  conditions  the  man  who 
wanted  a  building  site  would  pay  a  tax  of  $50  a 
year  to  the  community  instead  of  $1,000  capital 
value  to  the  owner.  This  would  end  his  relation 
to  the  state  as  well  as  to  the  landlord.  There  would 
be  no  other  taxes  of  any  kind.  Farm  tenants  would 
become  proprietors  by  the  same  process.  Capi- 
talists would  be  relieved  of  the  prohibitive  cost  of 
building  sites.  Great  estates  would  be  broken  up, 
and  land  monopoly  would  come  to  an  end.  Then 
men  would  own  land  merely  to  use  it;  and  they 
would  use  it  in  its  most  productive  way. 

The  single  tax  is  not  land  nationalization.  The 
ownership  of  the  land  by  the  state  is  not  contem- 
plated. Nor  is  it  suggested  that  we  should  return 
to  the  village  community,  with  its  common  owner- 
ship of  the  land  and  its  periodic  distribution  among 
the  members.  Nor  does  the  single  tax  involve 
peasant  proprietorship,  such  as  prevails  in  France, 
Denmark,  Switzerland,  and  parts  of  Germany.  It 
does  not  involve  common  ownership  or  an  agricult- 


270  PRIVILEGE  AND  DEMOCRACY 

ural  state  at  all.  Neither  does  it  propose  to  limit 
the  amount  of  land  which  an  individual  may  hold 
or  to  promote  small  holdings,  such  as  have  been 
provided  for  by  recent  legislation  in  England  and 
Ireland. 

Any  such  solution  as  these  is  a  compromise  with 
the  evil.  Peasant  proprietorship  does  not  strike  at 
the  root  of  the  problem.  It  does  not  meet  the  real 
evil,  which  is  the  private  ownership  of  the  earth. 
Such  a  programme  only  increases  the  number  of  land- 
lords. It  makes  no  provision  for  the  generations 
which  are  to  follow.  Small  holdings  and  peasant 
proprietorship  fail  to  recognize  the  right  of  the 
whole  people  to  the  land.  It  is  not  the  great  estate, 
it  is  the  right  of  one  man  or  of  ten  million  men  to 
the  private  and  exclusive  ownership  of  the  land, 
which  is  wrong. 

The  state  would  not  own  the  land.  It  would, 
however,  be  the  universal  rent  collector.  Neither 
the  title,  the  owner,  nor  the  present  methods  of 
transfer  would  be  disturbed.  True,  it  would  make 
but  little  difference  to  the  present  owner  whether 
the  land  itself  or  only  its  annual  income  is  taken. 
In  either  event  the  land  would  have  no  value  for  the 
purpose  of  sale.    It  would  be  valuable  only  for  use. 

The  single  tax  is  an  automatic  reform.  Its 
motive  is  to  insure  economic  opportunities  for  all 
time.  It  opens  up  the  earth  to  all.  It  endows 
mankind  to-day  and  to-morrow  with  its  common 


THE  REMEDY  CONSIDERED  271 

heritage.  Under  it  residence  sections  could  no  longer 
be  used  as  cow  pastures;  they  would  be  used  for 
human  habitation.  Suburban  building  lands  would 
be  developed  and  cities  would  spread  out  over  a 
wide  area  in  the  country  districts.  The  land  would 
be  opened  up  for  cultivation.  It  would  be  allotted 
by  the  natural  demands  of  agriculture.  If  it  were 
profitable  to  use  it  for  market  gardens,  it  would  be 
used  for  market  gardens.  If  it  were  more  profit- 
able to  farm  it  in  large  estates,  it  would  be  divided 
into  large  estates.  The  law  of  demand  and  supply 
would  automatically  determine  the  size  of  holdings. 
But  as  the  country  increased  in  population  and  the 
pressure  of  humanity  increased  the  demand,  its  sub- 
division would  naturally  follow. 

Mineral  resources  would  be  opened  up  by  the 
same  pressure.  Their  owners  would  be  compelled 
to  use  them  or  permit  others  to  do  so.  Million-acre 
estates  in  the  West  could  no  longer  be  used  for 
grazing  purposes.  The  burden  of  taxation  would 
render  it  impossible.  Monopoly  would  be  destroyed 
at  its  root.  It  would  be  destroyed  by  the  simplest 
of  methods  and  the  only  method  possible  short  of 
ownership  by  the  state.  The  pressure  of  self-interest 
would  lead  to  the  opening  up  of  the  land  and  the 
resources  of  nature  to  use,  and  to  use  in  their  most 
productive  way. 

As  we  have  seen,  nearly  all  of  the  menacing 
monopolies  are  either  identified  with  the  land  or  are 


272  PRIVILEGE  AND  DEMOCRACY 

connected  with  the  railways  or  are  made  possible  by 
the  protective  tariff.  The  land  monopolies  are  the 
most  complete  and  the  most  perfect.  It  is  the 
ownership  of  three-fourths  of  the  iron  ore  in  the 
United  States  and  the  bulk  of  the  coking  coal  that 
makes  the  Steel  Trust  invincible.  It  cannot  be 
reached  by  competition,  and  regulation  is  impos- 
sible. The  same  is  true  of  the  anthracite-coal  mo- 
nopoly, of  the  bituminous-coal,  the  oil,  copper,  lead, 
and  natural-gas  monopolies.  It  is  the  ownership  of 
limited  sites  of  land  that  makes  these  monopolies  so 
easily  consolidated  and  immune  from  every  form  of 
attack.  They,  too,  have  been  and  are  still  aided  by 
the  railways,  and  are  safeguarded  from  foreign  com- 
petition by  the  tariff. 

Railway  discriminations  and  the  tariff  have  made 
possible  the  sugar,  wool,  leather,  paper,  lumber, 
and  other  monopolies.  They  are  the  products  of 
class  legislation.  They  are  not  the  outcome  of  the 
natural  evolution  of  industry.  Nor  are  they  the 
final  flowering  of  the  industrial  process  which  began 
with  the  steam-engine.  They  are  not  due  to  any 
great  skill  on  the  part  of  their  creators.  They  enjoy 
no  sanctity  of  superior  ability.  They  are  the  prod- 
ucts of  class-made  privileges. 

These  monopolies  can  be  destroyed  by  the  same 
tools  which  created  them.  They  can  be  destroyed 
by  the  abolition  of  the  tariff,  the  public  ownership 
of  the  railways,  and  the  taxation  of  the  natural 


THE  REMEDY  CONSIDERED  273 

resources  with  which  they  arc  identified.  The 
owners  of  these  limited  mineral  sites  could  no  longer 
sit  idly  on  the  preserves  which  they  have  acquired 
and  limit  the  output.  The  resources  would  have 
to  be  developed  in  order  to  meet  the  tax.  A  great 
increase  in  production  would  take  place.  Compe- 
tition would  be  re-established  and  prices  would  fall 
in  consequence.  The  domestic  producer  could  not 
prevent  this  by  combination  with  the  foreign  manu- 
facturer. The  pressure  in  the  rear  would  prevent 
it.  Raw  materials  would  sell  at  their  labor  rather 
than  their  scarcity  cost,  while  the  independent  pro- 
ducer would  be  placed  on  a  footing  of  equality  with 
those  who  own  the  raw  materials  of  production. 

There  are  only  two  ways  by  which  the  economic 
well-being  of  humanity  can  be  improved.  One  is 
by  an  increase  in  the  amount  of  wealth.  The  other 
through  its  more  just  distribution.  Poverty  can  be 
abolished  in  no  other  way.  It  is  often  assumed  that 
there  is  not  enough  wealth  to  go  around.  As  we 
have  seen,  however,  the  annual  wealth  produced  in 
America  amounts  to  $1,170.20  for  every  family  of 
five,  which  is  just  about  two  and  a  half  times  the 
average  wage  as  ascertained  by  the  census.  There 
is,  therefore,  wealth  in  abundance  were  it  justly 
distributed. 

But  the  taxation  of  land  values  would  increase 
this  production.  It  would  also  equitably  distribute 
it.     Of  this  there  can  be  no  possible  doubt.    The 


274  PRIVILEGE  AND  DEMOCRACY 

taxation  of  land  values  would  affect  not  agriculture 
alone,  not  mining  alone,  but  all  industry  would 
sympathetically  respond  to  the  stimulus  which  the 
opening  of  the  land  would  involve.  Houses,  fac- 
tories, and  improvements  would  be  encouraged  in 
the  cities  and  the  country,  while  the  stimulus  of 
self-interest  would  lead  those  who  own  more  than 
they  can  profitably  use,  to  dispose  of  their  holdings 
to  those  who  would  develop  them. 

This  movement  would  be  still  further  stimulated 
by  the  exemption  of  all  improvements,  all  ma- 
chinery, all  factories,  and  the  products  of  labor  from 
taxation.  Capital  and  labor  would  be  encouraged, 
not  penalized.  Capital  now  locked  up  in  land 
speculation  would  be  forced  into  active  business 
enterprise,  while  the  removal  of  the  taxes  upon  all 
sorts  of  consumable  wealth  would  add  a  further 
stimulus  to  industry  and  production.  Persons  of 
small  capital  could  engage  in  industry.  They  could 
organize  companies  and  acquire  sites  at  little  or  no 
cost.  A  revival  of  small  industry  would  follow.  It 
would  not  require  any  aid  from  the  state.  It  would 
come  from  the  voluntary  action  of  the  men  them- 
selves. The  increase  in  wages,  the  cheapening  in 
the  cost  of  land,  the  diminished  cost  of  tools  and 
machinery  would  lead  to  the  organization  of  co- 
operative industries  on  a  small  scale. 

But  the  great  gain  would  come  from  the  new  light 
of  hope,  of  freedom,  of  industrial  independence  that 


THE  REMEDY  CONSIDERED  275 

would  brighten  the  eye  of  all.  Then  each  man 
could  more  readily  choose  his  calling;  he  would 
not  be  driven  to  accept  the  job  that  was  nearest 
at  hand.  A  new  country  with  new  vistas  would 
always  beckon  to  him  just  as  it  did  to  his  fore- 
fathers; but  it  would  be  a  country  in  which  all  the 
gains  of  civilization  would  serve  him  and  his  chil- 
dren. The  human  mind  can  no  more  picture  the 
society  which  would  result  from  the  forcing  of  all 
land  into  use,  and  its  most  productive  use,  than 
the  imagination  of  Watt  could  have  foreseen  the 
changes  which  were  to  follow  the  discovery  of 
steam,  or  of  Franklin  the  discovery  of  electricity. 
In  comparison  with  the  effects  of  this  revolution,  all 
other  reforms  for  which  we  are  now  agitating  would 
be  inconsequential. 


CHAPTER  XXIII 
THE  NEW  DISPENSATION 

This  stimulus  to  production  would  only  achieve 
this  result  if  the  increased  wealth  were  properly  dis- 
tributed. How,  it  may  be  asked,  would  the  farmer, 
the  wage-earner,  and  the  great  mass  of  humanity 
be  bettered  by  the  change? 

In  the  first  place,  the  abolition  of  all  indirect 
Federal  taxes  would  save  the  consumer  $600,000,000 
a  year.  It  would  free  him  from  the  monopoly  prices 
now  exacted  by  reason  of  the  tariff.  For  the  tariff 
has  increased  the  cost  of  living  and  placed  a  burden 
upon  the  consumers  of  America  of  from  one  and  one- 
half  to  two  billion  dollars  a  year.  These  indirect 
taxes  and  monopoly  charges  are  paid  most  largely 
by  the  poor.  For  the  consumption  of  sugar,  to- 
bacco, wool,  cotton,  fuel,  oil,  meat,  and  foodstuffs 
is  out  of  all  proportion  to  the  relative  incomes  of 
the  rich  and  the  poor. 

The  tariff  taxes  are  regressive  taxes.  They  are 
exaggerated  poll  taxes.  They  bear  most  heavily 
on  those  least  able  to  pay  them.  The  abolition  of 
indirect  taxes  and   monopoly  charges  would   add 

276 


THE  NEW  DISPENSATION  277 

from  $100  to  $200  a  year  to  the  purchasing  power 
of  each  family.  The  price  of  commodities  would 
fall  to  this  extent.  But  this  is  not  all.  The 
abolition  of  all  taxes  upon  houses,  buildings,  and 
things  which  labor  produces  would  still  further 
reduce  the  cost  of  living.  It  would  cheapen  the 
cost  of  everything  consumed.  For  taxes  upon 
labor  products  are  shifted  on  from  the  producer  to 
the  consumer  until  they  are  finally  lodged  with  him 
who  buys.  With  these  taxes  abolished,  prices  would 
still  further  fall.  Money  would  buy  more  than  it 
does  to-day.  It  would  go  further.  All  this  would 
elevate  the  standard  of  living. 

Thus  the  well-being  of  the  consuming  class  would 
be  improved.  Then,  too,  the  landlord  would  cease 
to  be  a  claimant  in  distribution.  His  share,  which, 
as  we  have  seen,  amounts  to  probably  three  billion 
dollars  a  year,  would  pass  to  the  community,  leaving 
only  the  capitalist  and  the  worker  to  struggle  for  the 
output.  How  would  the  taxation  of  land  values 
affect  the  relations  of  these  claimants?  How  would 
it  insure  to  the  worker  the  full  product  of  his  toil, 
and  to  the  capitalist  only  a  fair  return  upon  his  in- 
vestment? How,  in  other  words,  would  the  condi- 
tion of  him  whose  only  capital  is  in  his  labor  be 
improved? 

We  can  easily  imagine  the  results  which  would 
follow  from  some  calamity  of  nature  which  di- 
minished the  population  of  the  country  by  one- 


278  PRIVILEGE  AND  DEMOCRACY 

half.  The  effect  upon  the  distribution  of  wealth 
would  be  immediate.  The  relations  of  classes 
would  be  reversed.  Mills  and  factories  would  be 
short-handed.  The  mines  and  the  countryside 
would  be  denuded  of  labor.  A  clamor  for  workmen 
would  ensue.  The  farmer  would  compete  with  the 
mill-owner.  The  railroads  would  struggle  with  the 
mine-operator.  The  newspapers  would  be  filled  with 
alluring  advertisements  of  positions  seeking  men. 

Wages  would  rise  with  great  rapidity.  They 
would  go  up  by  leaps  and  bounds.  The  tramp  and 
vagrant  class  would  disappear.  So  would  soup 
houses  and  the  bread  lines  upon  our  streets.  Vice 
and  crime  would  greatly  diminish,  and  the  inmates 
of  charitable  and  penal  institutions  would  be  reduced 
to  a  diminishing  point.  The  unemployed  and  de- 
linquent classes  would  fill  the  vacuum.  Those  in- 
dustries which  were  the  least  attractive  would  be 
the  last  to  be  filled,  for  the  wage-earner  would  be  in 
a  position  to  choose  his  employment.  For  the  time 
being  he  would  be  the  master  of  the  situation. 
There  would  be  two  jobs  hunting  for  every  man. 
Under  existing  conditions  there  are  more  men 
than  jobs.  And  it  is  this  that  depresses  wages.  A 
few  men  out  of  employment  will  disturb  the  equi- 
librium of  wages.  They  impair  the  standard  of 
living  of  their  fellows. 

With  the  supply  of  labor  thus  reduced,  a  new 
relationship  between  capital  and  labor  would  arise. 


THE  NEW  DISPENSATION  279 

Arrogance  would  give  way  to  a  kind  of  partnership. 
The  two  agencies  in  production  would  come  together 
on  terms  of  equality.  A  readjustment  of  all  indus- 
trial relations  would  take  place.  Men  would  not 
need  to  sacrifice  their  lives  in  order  to  escape  star- 
vation. Safety  appliances  and  compulsory  insur- 
ance would  be  provided  as  a  matter  of  necessity. 
Otherwise  the  employer  could  not  keep  his  men.  In 
place  of  the  struggle  for  a  chance  to  labor,  there 
would  be  substituted  a  struggle  on  the  part  of 
employers  for  men. 

Such  are  some  of  the  obvious  results  which  would 
follow  such  a  decrease  in  population.  History  offers 
a  complete  confirmation  of  this  hypothesis.  In  the 
fourteenth  century  the  black  plague  swept  over  Eu- 
rope. It  appeared  in  England  in  1348  and  1349, 
and  carried  off  one-third  of  the  population  in  a  few 
years'  time.  The  spirit  of  society  was  revolutionized 
by  it.  A  dearth  of  labor  was  created.  Wages  shot 
up  from  two  to  three  hundred  per  cent,  in  a  few 
years'  time.  The  landlords  were  unable  to  work  their 
farms.  They  could  not  market  their  products.  Ten- 
ants deserted  their  holdings  in  order  to  participate 
in  the  increased  wages  that  were  offered.  In  conse- 
quence landlords  reduced  their  rents,  or  relieved  their 
tenants  from  payment  altogether.  Many  members 
of  the  aristocracy  were  impoverished.  This  was 
the  golden  age  of  British  peasantry.  They  com- 
manded the  situation. 


280  PRIVILEGE  AND  DEMOCRACY 

"It  was  both  easy  and  profitable  for  a  villein  to 
turn  his  back  upon  an  unwise  lord  and  escape  to 
another  manor  or  to  a  town.  Only  in  a  very  few 
cases  does  it  seem  to  have  been  possible  to  get 
laborers,  servants,  or  tenants  under  the  old  condi- 
tions. The  great  point  of  complaint  was  the  rise 
in  wages.  In  very  many  cases  villeins  were  com- 
pelled to  take  up  vacant  holdings.  In  others,  the 
lands  were  let  on  lease  to  free  tenants.  And,  as  the 
supply  of  land  was  much  greater  than  the  demand 
for  it,  villeins  were  able  to  compel  the  lords  to  con- 
sent to  the  commutation  of  services.  Moreover,  it 
appears  that  the  rents  paid  were  frequently  lower 
than  before.  Thus  the  black  death  resulted  in  an 
increase  of  free  tenements  and  a  decrease  of  the  lord's 


The  land-owners  controlled  Parliament.  They 
sought  to  check,  by  criminal  laws,  the  increase  in 
wages  and  the  abandonment  of  holdings  by  the  serfs. 
They  enacted  the  Statute  of  Laborers,  by  which  it 
was  provided  that  all  workmen  should  accept  the 
same  rate  of  wages  that  prevailed  before  the  plague. 
The  penalties  were  severe.  Imprisonment  was  de- 
creed against  any  one  who  left  his  service  before 
the  end  of  his  term.  But  the  act  was  of  no  avail. 
It  was  re-enacted  with  increased  penalties  from  time 
to  time.  The  landlords  controlled  the  administra- 
tion of  the  law.  The  peasantry  was  ignorant  and 
immobile.    Yet  fortified  with  all  of  the  power  of 

« History  of  the  English  Agricultural  Laborer,  by  Dr.  W.  Hasbach, 
p.  22. 


THE  NEW  DISPENSATION  281 

the  government,  the  aristocracy  was  helpless  before 
the  situation.  The  shortage  in  the  labor  market 
reduced  rent  and  increased  wages.  The  advantage 
was  all  with  the  laborer  and  the  tenant.  This  con- 
dition continued  for  nearly  two  centuries,  until 
population  again  began  to  press  upon  the  land. 
This  is  the  opinion  of  all  those  who  have  studied 
this  period  of  English  history.  ''I  have  stated  more 
than  once,"  says  Professor  J.  E.  Thorold  Rogers, 
''that  the  fifteenth  century  and  the  first  quarter  of 
the  sixteenth  were  the  golden  age  of  the  English 
laborer."  * 

That  the  results  described  would  follow  a  sudden 
reduction  in  population  is  obvious.  It  could  not  be 
otherwise.  And  the  condition  of  labor  would  con- 
tinue to  improve  until  population  again  filled  in  the 
vacuum. 

Let  us  reverse  this  picture.  The  taxation  of  land 
values  would  be  a  permanent  black  plague  to  land 
monopoly.  It  would  not  diminish  the  number  of 
wage-earners.  It  would  increase  the  demand  for 
labor.  This  increase  in  the  demand  would  have  the 
same  effect  upon  wages  as  the  decrease  in  the  supply. 
All  of  the  land  in  the  country  would  seek  tenants 
and  workers.  Mines  would  have  to  be  operated  to 
meet  the  burdens  of  taxation.  So  would  city  sites. 
So  would  farms.  Almost  immediately  men  would 
be  masters  of  the  situation.    They  would  be  able 

« Work  and  Wages,  p.  326. 


282  PRIVILEGE  AND  DEMOCRACY 

to  choose  their  employment.  They  would  be  free 
from  the  pressure  of  hunger  which  forces  them  into 
the  first  opportunity  which  offers.  Hope  would 
take  the  place  of  despondency,  for  there  would  be 
opportunity  to  work  where  one  willed.  Then  the 
land  would  serve  the  people  instead  of  humanity 
serving  the  landlord.  The  wage-worker  would  find 
his  nominal  wages  greatly  increased,  and  the  price 
of  all  the  necessities  of  life  correspondingly  dimin- 
ished. For  wealth  would  be  created  in  greater 
abundance. 

But  the  opening  up  of  the  resources  of  the  earth 
by  taxation  would  do  far  more  than  the  reduction 
in  the  number  of  laborers.  For  loss  of  population 
means  a  loss  in  the  productive  as  well  as  the  con- 
suming power  of  society.  Increasing  opportunity, 
on  the  other  hand,  involves  an  increase  in  the  per 
capita  production  of  wealth.  The  division  of  labor 
which  has  taken  place  has  increased  the  per  capita 
production.  The  labor  of  a  single  man  produces 
to-day  three  hundred  watches,  where  a  generation 
ago  it  produced  at  most  a  hundred.  The  skilled 
workman  at  a  machine  turns  out  three  hundred 
pairs  of  shoes,  where  the  cobbler  at  the  bench  pro- 
duced at  the  most  a  score.  Where  the  housewife 
at  the  loom  was  able  to  clothe  only  her  family,  now 
a  child  at  the  machine  will  produce  cloth  for  a  hun- 
dred families.  The  division  of  labor  has  so  in- 
creased the  productivity  of  the  worker,  that  poverty 


THE  NEW  DISPENSATION  283 

should  have  long  since  disappeared  from  the  face 
of  the  earth.  And  this  increase  in  productive  power 
would  go  to  the  producing  classes  were  it  not  in- 
tercepted by  some  maladjustment  of  the  laws  of 
distribution.  This  maladjustment  would  disappear 
with  the  opening  up  of  the  resources  of  the  earth, 
for  the  increase  in  the  opportunities  for  labor  would 
place  the  producing  class  at  such  an  advantage  that 
they  would  be  able  to  appropriate  to  themselves 
all  of  the  products  of  their  labor. 

The  taxation  of  land  values  would  do  this.  It 
would  affect  the  labor  market  just  as  did  the  black 
plague  or  the  discovery  of  a  new  continent.  Labor 
would  be  the  predominant  partner  in  the  wage 
agreement.  No  statute  of  laborers  or  combination 
of  capitalists  could  affect  this  situation.  Through 
the  forcing  of  the  land  into  use,  and  its  most  pro- 
ductive use,  and  the  full  taxation  of  rental  values, 
rent  would  vanish  and  the  wealth  of  the  world  would 
be  distributed  between  labor  and  capital. 

A  few  short  years  would  usher  in  such  prosperity 
as  the  world  has  never  seen.  Involuntary  poverty 
would  disappear.  Opportunity  would  call  upon  tal- 
ent. There  would  be  no  limits  to  the  demand  for 
labor.  The  benignant  laws  of  freedom  would  sup- 
plant the  ignorant  laws  of  man.  Competition  for 
men  would  arise  where  now  there  is  none.  Initia- 
tive and  talent  would  enjoy  an  opportunity  to  ex- 
press themselves.    Men  would  not  be  limited  to  the 


284  PRIVILEGE  AND  DEMOCRACY 

single  job  which  they  must  now  accept  or  starve. 
They  would  be  free  to  labor  at  that  which  was  most 
congenial,  and  at  that  which  was  consequently  the 
most  productive.  Then  labor  and  capital  would  be 
free  from  all  taxes.  There  would  be  no  barriers  to 
trade,  no  tribute  on  wealth.  Only  the  landlord 
would  disappear  as  a  claimant  in  distribution.  He 
now  performs  no  useful  service.  He  would  then  re- 
ceive no  compensation.  Rent  would  flow  to  society, 
and  society  in  turn  would  be  divided  into  two 
claimants,  labor  and  capital,  and  they  would  meet 
in  the  struggle  for  the  division,  just  as  they  now 
meet  in  every  new  country  where  the  worker  is  free 
to  choose  whether  he  will  work  for  himself  or  for 
another.  And  the  experience  of  all  new  countries, 
where  land  is  free,  demonstrates  that  labor  is  then 
the  dominant  partner  in  distribution. 

It  may  be  urged  that  such  an  increase  in  wages 
would  endanger  industry.  The  reverse  would  be 
true.  It  would  destroy  monopoly  and  imperil  those 
combinations  which  are  identified  with  the  land.  It 
would  usher  in  competition  and  stimulate  innumer- 
able new  industries.  But  prosperity  does  not  con- 
sist in  the  inflated  dividends  of  the  Steel  Trust  or 
the  watered  securities  of  the  railroads;  it  does  not 
consist  in  crowded  New  York  hotels  or  summer 
resorts.  Prosperity  should  consist  in  twenty  mill- 
ion families  whose  wages  or  incomes  enabled  them 
to  live  in  comfort  and  happiness.     It  is  they  who 


THE  NEW  DISPENSATION  285 

form  the  market.  It  is  they  who  consume  the  out- 
put of  mill  and  of  factory.  Only  a  small  portion  of 
the  wealth  that  is  produced  is  consumed  by  the  priv- 
ileged classes.  And  were  the  income  of  America's 
working  population  doubled  to-morrow,  there  would 
be  ushered  in  an  era  of  prosperity  which  would 
flood  the  factories  with  orders  and  bring  to  the 
docks  of  New  York  the  surplus  products  of  other 
lands.  For  the  wants  of  man  know  no  limit. 
Our  eighty  millions  of  people  can  consume  many 
times  what  they  do  to-day  and  still  many  legitimate 
wants  would  remain  unsatisfied. 

The  taxation  of  land  values  would  awaken  indus- 
try all  along  the  line.  It  would  give  an  impetus  to 
the  building  of  homes  and  factories.  Agriculture 
and  mining  would  be  awakened  in  the  same  manner. 
Those  who  produced  the  raw  materials  would  con- 
sume the  finished  product.  And  they  in  turn  would 
call  upon  the  farmer  and  the  miner  for  the  raw  ma- 
terials. With  increasing  wages  there  would  be  in- 
creasing demand  for  goods.  This  would  ordinarily 
increase  prices.  But  the  abolition  of  rent  and  the 
opening  up  of  all  nature  to  production,  as  well  as 
the  abolition  of  all  taxes  upon  labor  and  industry, 
would  reduce  prices  to  their  labor  cost. 

Thus  the  taxation   of  land  values   is  a  social  \ 
philosophy — a  philosophy  as  adequate  as  socialism 
itself.     It  would  destroy  monopoly  and  exalt  the 
claims  of  humanity  above  the  claims  of  privilege. 


286  PRIVILEGE  AND  DEMOCRACY 

It  would  return  the  land  to  the  community  and 
retain  it  for  the  community  for  all  time.  Then  dis- 
tribution would  give  to  each  according  to  his  labor, 
and  society  would  take  from  each  according  to  the 
privilege  which  he  enjoyed.  Then  there  would  arise 
an  era  of  freedom  in  every  walk  of  life. 


CHAPTER  XXIV 
THE  OPEN  DOOR  AND  THE  OPEN  HIGHWAY 

Thus  the  taxation  of  land  values  is  a  social 
philosophy,  a  philosophy  of  freedom,  of  industrial 
liberty  in  all  the  relations  of  life.  The  single  tax 
involves  the  abolition  of  the  protective  tariff  and 
the  vexatious  interference  with  trade  and  industry 
which  now  strangles  the  production  and  exchange 
of  wealth.  It  is  not  a  natural  system  of  taxation 
alone,  it  is  a  natural  system  of  industrial  and  social 
relations. 

We  have  seen  that  the  abolition  of  the  system  of 
indirect  taxes  would  save  the  consumers  about 
$600,000,000  a  year  in  taxes,  which  are  all  paid  by 
labor,  in  some  form  or  other.  It  would  also  save 
them  from  the  indirect  costs  of  the  system,  which 
amount  to  from  one  and  a  half  to  two  billion  dollars 
a  year  more.  America  would  then  become  the 
cheapest  place  in  the  world  in  which  to  live.  It  is 
now  one  of  the  most  expensive,  possibly  the  most 
expensive.  The  bottom  would  be  knocked  out  of  the 
great  monopolies  which  are  mothered  by  the  tariff. 

But  the  gain  would  not  end  here.  Not  only 
would  the  people  have  that  much  more  to  spend 

287 


288  PRIVILEGE  AND  DEMOCRACY 

for  the  things  they  desire;  not  only  would  two 
billion  dollars  be  added  to  the  purchasing  power  of 
the  country;  not  only  would  the  wheels  of  industry 
be  set  in  motion  to  satisfy  these  increased  wants; 
but  trade  and  industry  would  be  awakened  in  a 
thousand  unknown  fields  by  the  freedom  of  trade 
which  would  follow.  We  have  no  means  of  telling 
what  industries  are  rendered  impossible  by  the 
tariff,  or  the  new  industries  which  would  spring  up 
by  reason  of  its  abolition.  But  the  coming  of  lib- 
erty has  always  been  followed  by  a  great  industrial 
awakening.  For  commerce  hates  barriers.  It  in- 
stinctively follows  the  lines  of  least  resistance.  For 
every  industry  that  is  helped  by  the  tariff,  probably 
two  are  rendered  impossible  by  it.  The  freedom  of 
trade  between  the  states  of  the  American  Union 
proves  this.  So  does  the  awakening  which  followed 
the  abolition  of  the  corn  laws  in  Great  Britain  in 
1846.  Industries  which  had  been  languishing  for 
years  awakened  into  life.  The  commerce  of  Eng- 
land assumed  command  of  the  seas.  Her  iron,  steel, 
wool,  and  cotton  factories  took  the  world  by  storm. 
Were  the  trade  of  America  free  to  follow  its  natural 
channels,  our  exports  would  command  the  markets 
of  the  world.  America  is  the  cheapest  of  producers. 
This  is  true  in  almost  every  line  of  industry.  We 
have  the  most  abundant  raw  materials,  the  most 
highly  skilled  labor,  the  highest  per  capita  invest- 
ment of  capital.    Were  the  barriers  of  trade  removed 


THE  OPEN  DOOR  289 

the  commerce  of  the  world  would  be  ours  in  a  few 
years'  time. 

These  are  the  by-products  of  the  single  tax. 
Freedom  of  trade  is  but  part  of  freedom  in  every 
relation  of  life.  And  freedom  is  no  less  the  natural 
than  the  scientific  law  of  progress. 

There  is  yet  another  corollary  to  the  taxation  of 
land  values.  And  that  is  the  free,  open  highway. 
There  are  certain  services  so  fundamental  to  our  life 
that  they  cannot  with  safety  be  left  in  private 
hands.  We  do  not  question  this  as  to  the  activities 
already  assumed  by  the  state.  No  one  thinks  of 
turning  back  the  schools,  libraries,  parks,  and  post- 
office  to  private  hands.  Even  the  most  reactionary 
is  in  favor  of  the  free,  open  public  highway.  Yet 
the  highways  were  in  private  hands  up  to  very 
recently.  The  private  toll  road  is  still  to  be  found 
in  some  parts  of  the  country.  But  it  has  very  gen- 
erally disappeared  before  the  necessities  of  modern 
life.  And  the  railway  is  but  a  highway,  a  highway 
really  far  more  important  than  the  streets  of  our 
cities.  Through  it  the  life  of  the  nation  circulates. 
All  industry  is  dependent  upon  its  proper  adminis- 
tration. It  not  only  fixes  the  wages  of  ten  per  cent, 
of  our  workers,  it  vitally  affects  all  industry  and  the 
well-being  of  all  people.  Upon  its  favors  and  dis- 
eriminations,  discriminations  that  the  ingenuity  of 
the  government  and  the  skill  of  the  secret-service 
agent  cannot  trace,   many  of  the  most  menacing 


290  PRIVILEGE  AND  DEMOCRACY 

monopolies  are  reared.  The  price  which  is  paid  for 
beef  on  the  hoof,  for  sheep  on  the  range,  for  the  farm 
products  of  the  West  is  determined  by  the  railways, 
the  packers,  the  elevators,  and  the  warehousemen, 
whose  alliance  with  the  railways  is  no  longer  a  mat- 
ter of  doubt.  Eggs,  butter,  and  dairy  products, 
as  well  as  the  fruits  of  California  and  Florida,  are 
under  the  control  of  these  agencies,  which  fix  the 
price  the  farmer  receives  as  well  as  the  price  which 
the  consumer  pays.  The  cost  of  living  of  the  entire 
nation  is  in  a  large  measure  controlled  by  those  who 
own  these  agencies. 

Even  were  the  railways  open  to  all  on  equal 
terms,  even  were  they  to  abandon  their  coal  lands, 
to  dissolve  their  connection  with  private  industry, 
and  free  themselves  from  the  suspicion  which  now 
attaches  to  them,  they  should  not  be  entrusted  to 
the  caprices  of  private  management  and  control.  For 
the  function  which  the  railways  perform  is  a  public 
one — they  enjoy  a  part  of  the  sovereignty  of  the 
state.  That  the  railways  should  be  owned  by  the 
people  has  been  recognized  by  almost  every  civilized 
nation  save  Great  Britain  and  America.  These 
nations  alone  have  trusted  to  private  capital.  Eng- 
lish industry  is  suffering  in  consequence,  while  the 
politics  of  America  have  been  corrupted  to  the  core 
and  her  industry  reduced  to  monopoly  in  every  great 
necessity  of  life. 

There  is  only  one  rule  of  private  railway  manage- 


THE  OPEN  DOOR  291 

ment,  and  that  is  charging  all  that  the  traffic  will 
bear.  This  is  the  solemn  duty  of  those  intrusted 
with  the  administration  of  the  property.  They  are 
bound  to  make  as  much  profit  as  possible.  The 
railway  president  may  be  the  most  humane  of 
men  or  the  most  far-seeing  of  social  reformers. 
He  would  be  no  more  justified  in  adopting  any 
other  rule  of  management,  than  the  agent  of  the 
Astor  estate  would  be  justified  in  accepting  any 
other  rental  than  that  which  the  public  would 
pay. 

A  railway  president  cannot  serve  the  public  and 
his  stockholders.  Their  interests  are  diverse.  It 
is  his  duty  to  make  dividends.  To  do  this,  he  must 
adopt  whatever  means  are  necessary  to  secure  the 
traffic.  And  it  is  not  possible  for  any  commission 
to  trace  the  subterranean  methods  which  may  be 
devised  in  the  granting  of  rebates,  discriminations, 
or  favors.  The  motive  of  railway  management 
should  be  service,  not  profits.  This  is  impossible 
so  long  as  the  railways  are  in  private  hands. 

There  is  still  another  reason  for  the  public  owner- 
ship of  the  highways.  Railway  values,  as  we  have 
seen,  are  land  values.  Earnings  respond  to  the 
same  influences  as  rent.  Inflated  railway  capitali- 
zation is  an  unearned  increment.  The  earnings 
of  the  railways  of  the  country  increased  from 
$1,222,089,773  in  1897  to  $2,346,600,000  ten  years 
later,  or  an  increase  of  nearly  one  hundred  per  cent. 


292  PRIVILEGE  AND  DEMOCRACY 

During  the  same  period  capitalization  grew  from 
$10,635,008,074  to  $16,082,146,683.  The  develop- 
ment of  the  country,  the  growth  of  industry,  the 
coming  of  immigration,  all  these  have  added  to  the 
tribute  which  those  who  own  the  highways  have 
been  able  to  extract  from  the  labor  and  industry  of 
the  country.  Every  exertion  of  society  adds  to 
the  value  of  these  properties,  just  as  it  adds  to  the 
value  of  a  corner  lot  in  a  great  city. 

It  is  true  this  social  value  can  be  retaken  by 
taxation  just  as  can  land  values  proper.  And 
many  persons  believe  that  the  railway  problem  can 
be  solved  through  this  means.  But  this  would  not 
put  an  end  to  corruption.  It  would  not  check  the 
waste  which  is  everywhere  apparent  in  railway 
management.  It  would  not  remove  the  antagonism 
between  the  private  interest  and  the  public  welfare, 
which  is  the  greatest  evil  of  the  private  ownership 
of  a  public  function. 

The  public  ownership  of  railways  would  do  more 
to  free  our  life  from  privilege  and  corruption  than 
any  other  reform.  In  commonwealth  after  com- 
monwealth politics  are  in  the  hands  of  the  feudal- 
like  interests,  which,  like  the  aristocracy  of  Great 
Britain  prior  to  the  reform  act  of  1832,  fill  the 
offices  of  the  state  and  the  nation  with  their  own 
retainers.  They  control  primaries  and  conventions, 
they  send  their  attorneys,  doctors,  and  agents  to 
State  assembhes.    At  their  dictation  United  States 


THE  OPEN  DOOR  293 

senators  are  elected,  who,  in  many  instances,  are 
their  paid  attorneys  and  representatives. 

The  class  warfare  is  bound  to  continue  so  long 
as  a  powerful  interest  controls  one-sixth  of  the 
wealth  of  the  nation;  an  interest  which  ramifies 
into  every  precinct  in  the  land  and  which  openly 
avows  that  it  is  necessary  to  corrupt  the  govern- 
ment in  order  to  protect  what  it  claims  as  its  own. 
Nor  can  industry  be  free  or  labor  receive  the  fruits 
of  its  toil,  so  long  as  it  hes  in  the  hands  of  what  is 
in  effect  an  arbitrary  tax-gatherer,  to  intercept  so 
much  of  the  wealth  produced  as  suits  its  fancy. 


CHAPTER  XXV 
THE  DEMOCRACY  OF  TO-MORROW 

We  are  beginning  to  see  that  democracy  is  some- 
thing more  than  the  freedom  to  speak,  to  write,  to 
worship  as  one  wills,  to  be  faced  with  one's  accusers, 
and  to  be  tried  by  one's  peers;  it  involves  far  more 
than  the  absence  of  absolute  government  or  the 
tyranny  of  an  hereditary  caste.  The  right  of  par- 
ticipation in  the  government,  irrespective  of  birth, 
race,  and  creed,  and  the  substitution  of  manhood 
suffrage  and  democratic  forms  for  monarchical  insti- 
tutions, do  not  of  themselves  constitute  democracy, 
immeasurably  valuable  as  these  achievements  are. 

Democracy,  too,  involves  far  more  than  a  system 
of  taxation  that  is  ethically  just;  it  involves  far 
more  than  the  right  to  trade  where  one  wills,  un- 
restrained by  tariff  laws;  it  involves  far  more  than 
the  taking  by  the  community  of  the  wealth  that  the 
community  creates  or  the  ownership  by  the  people 
of  the  highways,  so  essential  to  the  common  life. 
These  fundamental  changes  in  the  relation  of  man- 
kind to  its  environment  do  not  constitute  an  end 
in  themselves,  any  more  than  does  the  right  of  the 
ballot  or  of  participation  in  the  government.     All 

294 


THE  DEMOCRACY  OF  TO-MORROW      295 

these  things  are  but  means  to  an  end,  and  that  end 
is  industrial  freedom,  a  freedom  as  full  and  as  free 
to  the  poor  as  to  the  rich,  to  the  next  generation 
and  the  generations  which  follow  as  it  was  to  the 
generations  which  spread  themselves  out  upon  an 
unappropriated  continent.  Freedom  is  an  indus- 
trial far  more  than  a  political  condition. 

Unfortunately  the  idea  of  freedom  suggests 
license  when  demanded  for  all,  just  as  it  involves 
license  when  enjoyed  by  the  few.  Privilege  in- 
vokes the  beneficence  of  freedom  when  it  would 
stay  the  hand  of  the  state  in  any  attempt  to  control 
its  excesses,  just  as  it  invokes  the  perils  of  freedom 
when  it  would  be  protected  from  its  consequences. 
Privilege  protests  in  the  name  of  freedom  against 
regulation  of  the  railways  or  the  franchise  corpora- 
tions, or  the  protection  by  law  of  children,  women 
workers,  and  those  engaged  in  hazardous  pursuits. 
It  attacks  the  labor  union,  the  closed  shop,  and  the 
eight-hour  day  as  subversive  of  personal  liberty, 
but  invokes  another  argument  for  protection  from 
foreign  competition  or  the  right  to  monopoly  com- 
binations. 

The  political  economist  as  well  as  the  socialist 
has  confounded  the  evils  of  the  present  industrial 
system  with  freedom.  Laissez  fairs  is  credited  with 
the  tenement,  the  sweat-shop,  and  the  excesses  of 
capitalism.  But  freedom,  even  the  laissez  faire  of 
Quesnay,   Turgot,   Dupont  de  Nemours,   and  the 


296  PRIVILEGE  AND  DEMOCRACY 

brilliant  school  of  thinkers  who  laid  the  foundation 
for  the  abolition  of  the  feudal  system  and  the  op- 
pressive restraints  of  mercantilism,  is  a  far  different 
thing  from  the  travesty  of  industrial  liberty  which 
has  masqueraded  for  nearly  a  century  under  that 
name.  For  nowhere  has  there  been  freedom,  the 
freedom  of  access  by  humanity  to  the  source  of  all 
life.  The  land  and  the  resources  of  nature  have 
been  locked  up  with  title-deeds  of  private  owner- 
ship, and  mankind  has  been  forced  to  content  itself 
with  such  opportunities  as  privilege  offered.  True 
freedom,  true  laissez  faire,  involves  the  shattering 
of  all  these  chains  with  which  labor  is  bound,  and 
the  opening  up  of  the  earth  to  the  free  play  of  in- 
dividual talent.  It  involves,  too,  freedom  of  trade 
and  the  free  public  highway.  This  is  the  philoso- 
phy of  freedom. 

Freedom  is  the  law  to  which  all  life  responds. 
Freedom  underlies  the  philosophy  of  evolution, 
which  all  science  has  approved.  Through  freedom 
all  animate  life  has  progressed;  to  its  call  the  cave 
man  of  the  stone  age  has  advanced  by  slow  and 
tortuous  processes  up  to  the  civilized  type  of  to-day. 
But  the  appHcation  of  this  principle  to  human 
society  has  been  limited  to  the  formulation  of  the 
law  of  the  struggle  for  existence,  with  the  medium 
of  that  struggle  ignored. 

And  freedom  is  the  law  of  conscious  as  well  as  of 
unconscious  evolution,  of  historic  as  well  as  of  pre- 


THE  DEMOCRACY  OF  TO-MORROW      297 

historic  ages.  From  the  very  beginnings  of  organ- 
ized society  the  progress  of  man  has  been  in  almost 
direct  ratio  to  his  hberty.  This  is  written  across 
the  face  of  history  from  the  time  of  the  Grecian 
city-states  down  to  the  latest  experiment  in  nation- 
building  in  the  distant  Pacific.  It  was  economic 
freedom  that  enabled  the  Roman  people  to  bring 
all  Italy  to  their  feet.  It  was  the  home-owning 
soldier  who  carried  Roman  arms  all  over  Italy.  It 
was  economic  freedom  that  spread  the  republic 
over  the  face  of  Europe  and  gave  to  Rome  the 
supremacy  of  the  world.  It  was  the  same  economic 
liberty  which  awakened  the  Renaissance  and  re- 
suscitated commerce  in  the  towns  of  Italy  and 
Germany  during  the  Middle  Ages.  It  was  freedom 
to  make  and  to  trade  which  builded  the  congeries 
of  free  cities  from  the  Adriatic  to  the  mouth  of  the 
Rhine,  and  called  into  life  the  civilization  which 
had  been  buried  in  the  East  for  centuries.  It  was 
this  sort  of  freedom  which  gave  eminence  to  Venice, 
to  Florence,  to  Genoa,  to  the  Netherlands,  an  emi- 
nence which  was  later  seized  by  Great  Britain  when 
she  broke  free  from  the  restraints  imposed  by  the 
feudal  classes  on  trade,  industry,  and  commerce. 

Wherever  restrictive  laws  have  been  abolished, 
wherever  the  rock  of  economic  privilege  has  been 
smitten  with  the  touch  of  liberty,  wealth  has  gushed 
forth  as  it  never  did  before.  New  processes,  new 
ideas,  new  inventions  are  awakened  by  the  call  of 


298  PRIVILEGE  AND  DEMOCRACY 

freedom,  whether  it  be  the  opportunity  to  produce 
as  one  wills,  to  trade  as  one  wills,  or,  far  more 
important,  to  make  use  of  the  earth  free  from  the 
dead  hand  of  speculation. 

Two  great  nations  have  in  different  ways  and  at 
different  times  shaken  themselves  free  from  the 
chains  of  privilege.  They  broke  but  the  obvious 
chains  which  bound  them,  it  is  true,  but  the  effect 
was  electrical  on  the  production  and  distribution  of 
wealth.  When  the  States  General  was  convened  in 
1789,  France  was  entwined  with  as  many  laws  as 
the  threads  which  bound  Gulliver.  There  was  no 
freedom  of  thought,  no  freedom  of  action,  no  free- 
dom of  trade  or  commerce  even  within  the  kingdom. 
No  one  could  labor  at  a  trade  or  calling  without 
being  admitted  to  a  closed  corporation.  No  one 
could  manufacture  anything  or  plant  anything  ex- 
cept according  to  rules  laid  down  by  the  state.  The 
state  regulated  everything.  The  individual  could 
originate  nothing.  Even  the  kind  of  tools  to  be 
used  was  prescribed,  as  were  the  width  and  quality 
of  cloth.  Every  product  which  did  not  conform  to 
rule  was  confiscated  or  burned.  Individuals  could 
not  sell  or  buy,  except  on  permission  of  the  state. 
Exports  of  grain,  even  to  the  next  province,  were 
prohibited.  Agriculture  bore  every  burden  the 
seigneurs  or  their  agents  could  devise.  The  peas- 
ant paid  a  rack-rent  to  the  lord  as  well  as  all  the 
taxes  to  the  state.    He  had  to  work  on  the  estate  of 


THE  DEMOCRACY  OF  TO-MORROW      299 

the  lord  and  keep  the  roads  in  repair.  His  lands 
were  shot  over,  and  devastated  by  game.  He  had  to 
grind  his  grain  at  the  mill  of  the  lord  and  press  out  his 
wine  at  the  lord's  press.  Most  of  the  taxes  were  paid 
by  the  poor,  while  the  administration  of  justice  was  in 
the  hands  of  the  privileged  class.  All  life,  all  nov- 
elty, all  liberty  of  thought  or  action  was  suppressed. 
On  the  night  of  August  4,  1789,  the  National 
Assembly  entirely  destroyed  the  feudal  regime.  So- 
ciety received  a  new  birth.  It  was  purged,  as  is 
man  by  disease  or  a  base  metal  by  fire.  The  face  of 
France  was  swept  of  a  thousand  abuses,  as  the  face 
of  the  prairie  is  swept  by  flame.  Man  and  the  land 
were  left  naked  of  countless  privileges.  The  worker 
was  free  to  produce,  to  buy,  to  sell,  and  to  exchange. 
What  his  mind  and  hand  produced  remained  in 
great  measure  his  own.  There  remained  neither 
nobility  nor  peerage,  nor  hereditary  distinction,  nor 
distinctive  orders,  nor  feudal  regime,  nor  any  other 
superiority  except  that  of  public  officials  in  the 
exercise  of  their  function.  Better  than  all  that, 
there  remained  to  no  Frenchman  any  privilege  or 
exception  to  the  rights  which  are  common  to  all 
Frenchmen.  Farming  of  taxes  was  later  abolished. 
The  domains  of  the  clergy  were  assumed  by  the 
state.  There  was  a  redistribution  of  taxes.  There 
was  freedom  in  production  and  exchange.  The  old 
regime  was  destroyed.  The  foundations  of  liberty 
were  laid  for  all  the  world. 


300  PRIVILEGE  AND  DEMOCRACY 

Within  the  next  few  years  industry,  talent,  and 
genius  sprang  into  action.  From  the  farm  and 
the  town  the  armies  of  France  were  recruited  in 
the  name  of  liberty.  For  the  first  time  in  their 
history  the  people  were  conscious  that  the  nation 
meant  something  to  them.  The  army  of  France 
became  invincible.  The  peasant  and  the  artisan, 
enfranchised  from  the  multitude  of  vexatious  inter- 
ferences which  had  controlled  every  act  of  their 
lives,  turned  to  their  work  with  a  new  light  in 
their  eyes  and  a  new  hope  in  their  heart.  It  was 
the  night  of  August  4,  1789,  and  ''The  Self-Denying 
Ordinance"  that  made  the  revolution  permanent. 
It  was  this  that  sent  its  blessings  into  every  corner 
of  Europe,  and  brought  forth  in  Germany  the  reforms 
of  Stein  and  Hardenberg. 

A  half  century  later  England  opened  her  ports 
to  the  commerce  of  the  world.  She  did  not  destroy 
the  abuses  of  the  feudal  regime.  Very  many  of 
these  abuses  still  remain.  But  she  abolished  the 
corn  laws  imposed  by  the  landlords  in  control  of 
Parliament  for  the  protection  of  their  rents.  The 
increase  in  production  which  followed  surpassed  the 
expectations  of  Cobden  and  Bright.  England  was 
converted  into  a  vast  industrial  establishment.  She 
became  the  clearing-house  of  the  world.  Her  ex- 
ports increased  from  $288,934,380  in  1846  (the  year 
of  the  repeal)  to  $356,795,920  in  1850.  In  1853 
they  were  $494,668,905,  and  in  1857  $610,000,000. 


THE  DEMOCRACY  OF  TO-MORROW      301 

Freedom  of  trade  revolutionized  Great  Britain. 
It  was  a  revolution  which  benefited  chiefly  a 
limited  class.  Free  trade  did  not  destroy  poverty. 
It  did  not  relieve  the  agricultural  worker,  nor  did 
it  find  decent  homes  for  the  tenement  dweller. 
Free  trade  did  benefit  the  manufacturer  and  the 
trader.  It  increased  the  value  of  the  land  of  the 
United  Kingdom  by  calling  into  existence  great 
cities  and  towns  wherein  four-fifths  of  the  popula- 
tion now  dwell.  It  was  freedom,  the  freedom  to 
buy  and  sell,  unrestrained  by  artificial  barriers 
erected  by  legislation,  that  explained  the  immedi- 
ate ascendancy  of  the  British  people  in  industry. 
Colossal  as  were  these  benefits  of  freedom,  they  are 
inconsequential  in  comparison  with  those  which 
would  follow  from  the  freeing  of  the  land  as  well. 

And  it  was  economic  freedom  that  made  America 
what  she  is.  It  was  this  that  lies  at  the  foundation 
of  our  democracy.  It  was  not  the  Declaration  of 
Independence,  it  was  not  the  Federal  Constitution, 
it  was  not  tHe  freedom  from  an  established  church 
or  hereditary  privilege,  it  was  not  even  the  ballot; 
it  was  freedom  of  access  to  the  earth  and  all  its 
fulness,  it  was  the  free  land  that  explained  our 
institutions,  it  was  this  that  gave  us  industrial 
eminence.  The  things  we  hold  most  dear  are  but 
the  reflections  of  the  relations  of  the  American 
people  to  the  land.  And  it  is  the  passing  of  this 
freedom,  it  is  the  enclosure  of  the  land  and  the 


302  PRIVILEGE  AND  DEMOCRACY 

coming  of  the  tenant,  it  is  the  monopoly  of  that 
which  is  the  source  of  all  life,  that  has  brought 
down  the  curse  of  poverty  upon  us,  just  as  it  did 
in  Rome,  just  as  it  did  in  France,  just  as  it  did  in 
Ireland,  and  just  as  it  did  in  England  at  a  later  day. 
The  remedy  herein  proposed  will  restore  the 
foundations  upon  which  democracy  is  laid.  It  will 
insure  liberty  for  all  time.  It  will  insure  equality 
of  opportunity  in  every  walk  of  life  and  will  guar- 
antee to  the  worker  all  that  his  genius,  his  talent, 
or  his  labor  produces.  The  open  door,  the  open 
highway,  and  the  socialization  of  the  land  will 
destroy  the  tribute  now  exacted  by  monopoly.  It 
will  usher  in  a  social  order  in  which  men  will  be  as 
free  from  the  fear  of  want  as  they  are  from  want 
itself.  Then  men  will  look  forward  not  to  diminish- 
ing, but  to  increasing  opportunities,  for  freedom  will 
not  only  continuously  augment  the  wealth  of  the 
world,  it  will  insure  its  just  distribution  to  those 
who  produce  it. 


APPENDIX  I 

LAND  VALUES  IN  THE  UNITED  STATES 

In  1900  the  census  enumerators  endeavored  to  get  at 
land  and  improvement  values.  They  secured  reports  as 
to  land  values  in  the  case  of  farms  and  factories.  For 
the  farms  of  continental  United  States  it  appears  that  the 
land  and  improvement  values,  exclusive  of  the  buildings, 
amounted  to  78.6  per  cent,  of  the  total,  while  the  land 
values  of  factories  was  41.5  per  cent,  of  the  total.  The 
Commissioners  of  Taxes  and  Assessments  of  the  city  of 
New  York,  where  the  land  and  improvements  are  sepa- 
rately valued,  place  the  pure  land  values  at  63.2  per  cent, 
of  the  total.  The  land  values  of  the  city  of  Boston  are 
60.7  per  cent.,  while  Detroit  and  Milwaukee  place  the 
pure  land  values  at  53.9  per  cent,  and  55.5  per  cent, 
respectively.  Thomas  G.  Shearman,  a  conservative  stat- 
istician, placed  land  values  at  60  per  cent,  of  the  total, 
taking  the  country  as  a  whole,  and  estimated  the  pure 
land  values  of  the  country  at  i|27,600,000,000  in  1890. 
(Natural  Taxation,  p.  140.)  This  was  nineteen  years 
ago.  During  the  intervening  years  land  values  have 
increased  far  more  rapidly  than  at  any  previous  period 
in  the  history  of  the  country.  We  have  seen  that  there 
was  an  increase  in  the  value  of  farm  lands  alone  of 
$6,000,000,000  in  five  years'  time.  Since  1890,  too,  the 
mineral  resources  and  railways  have  been  monopolized, 
and  their  values  have  increased  enormously. 

303 


304  APPENDIX  I 

In  New  York  City  the  land  and  special  franchise 
values  averaged  $955  per  capita  in  1909,  while  in  some 
of  the  Western  States,  where  assessments  are  of  any  value, 
a  similar  per  capita  value  seems  to  prevail.  For  these 
reasons  it  would  seem  clear  that  $40,000,000,000  of  land 
values  was  a  very  conservative  estimate  in  1904.  There 
is  every  reason  to  believe  that  they  amount  to  $00,000,- 
000,000  at  the  present  time.  This  is  the  estimate  of  Mr. 
John  Moody,  the  editor  of  a  number  of  Wall  Street  pub- 
lications, who  says: 

"I  have  stated  that  the  estimated  wealth  of  the  nation 
is  to-day  about  $120,000,000,000.  Of  this,  about  one-half 
or  $60,000,000,000  is  what  might  be  called  created  wealth, 
and  the  balance  is  spontaneous  or  unearned  wealth — 
what  is  sometimes  called  the  'unearned  increment.'  .  .  . 
Let  me  try  to  show  a  little  more  clearly  what  I  mean  by 
these  different  kinds  of  wealth.  Take  one  of  the  large 
transportation  trusts  as  an  example,  the  Union  Pacific 
Railroad  system.  Eight  years  ago  its  capital  (market) 
value  was  approximately  $130,000,000,  and  this  repre- 
sented chiefly  the  real,  tangible,  created  property  at  that 
time.  Since  then,  less  than  $150,000,000  more  has  been 
invested  in  the  Union  Pacific  Railroad,  and  yet  the  market 
value  of  its  securities  to-day  is  not  $230,000,000,  as  you 
would  naturally  suppose,  but  is  over  $600,000,000.  The 
Pennsylvania  Railroad  system  fifteen  years  ago  was 
worth  $1,500,000,000;  to-day  it  is  worth  over  $2,500,- 
000,000;  the  Reading  system  in  1896  was  worth  about 
$120,000,000;  to-day  it  is  worth  $600,000,000.  The 
Great  Northern  Railroad  in  1890  was  worth  only  about 
$40,000,000;  to-day  it  is  worth  over  $500,000,000.  The 
public  utility  corporations  of  New  York  City  cost  to  con- 
struct less  than  $200,000,000,  and  yet  to-day  they  are 
capitalized  for  over  $1,000,000,000.  The  Standard  Oil 
Company  represents  an  original  investment  of  far  less 
than  $50,000,000,  and  yet  it  is  worth  in  the  markets  to-day 


LAND  VALUES  305 

nearly  $600,000,000.  The  great  Steel  Trust  has  actually 
cost  only  $400,000,000,  and  yet  it  is  worth  nearly 
$1,500,000,000. 

"The  difference  between  the  cost  of  these  things  and 
the  market  value  represents  the  unearned  increment,  or 
capitalized  value,  of  their  monopoly  or  special  privileges. 
This  increment,  created,  of  course,  by  the  community, 
the  growth  of  population  and  general  increase  of  produced 
wealth,  has,  as  the  country  has  grown,  increased  with  it, 
and  will  necessarily  continue  to  do  so."  ^ 

1  "The  Evolution  of  the  Trust,"  by  John  Moody,  The  Arena,  for 
May,  1907,  p.  479. 


APPENDIX  II 
THE  SUFFICIENCY  OF  THE  LAND  VALUES  TAX 

Is  a  land  values  tax  adequate  for  the  needs  of  the  nation, 
the  States,  and  the  local  authorities?  Thinking  only  of 
farming  lands,  many  people  assume  that  it  is  not;  they 
believe  that  it  is  necessary  for  the  government  to  disguise 
its  sources  of  revenue  in  order  to  secure  sufficient  funds 
to  maintain  the  state. 

It  is  not  in  the  rural  districts  that  land  values  are 
greatest.  The  land  values  of  New  York  City  alone  are 
equivalent  to  the  values  of  100,000,000  acres  of  ordinary 
farming  land.  The  land  values  of  all  our  cities  are  equal 
to  the  value  of  one-half  of  the  land  under  cultivation  in 
the  United  States.  And  this  does  not  include  the  colossal 
values  of  the  mineral  resources,  of  the  railways  and  the 
transportation  agencies.  Land  values  are  a  far  different 
thing  from  land,  and  the  taxation  of  land  values  is  a  far 
different  proposal  than  the  taxation  of  land. 

We  can  readily  see  the  sufficiency  of  the  tax  proposed 
from  a  consideration  of  the  values  already  existing.  The 
total  revenues  collected  by  all  of  the  agencies  of  the 
government  in  1902  amounted  to  $1,709,136,540.'  Of 
this  sum,  $670,789,517  was  collected  by  the  Federal  Gov- 
ernment, and  $1,038,347,023  by  the  States,  counties,  cities, 
and  local  divisions.  Most  of  the  local  revenues  came  from 
the  general  property  tax  on  land  and  improvements,  and 

>  Census  Bulletin,  "Wealth,  Debt  and  Taxation,"  p.  963. 
306 


THE  LAND  VALUES  TAX  307 

at  least  one-half  of  the  revenues  came  from  land.  So 
that  if  we  deduct  the  taxes  already  collected  from  land 
values,  it  leaves  the  sum  of  but  $519,173,511  to  be  shifted 
to  that  source  for  local  purposes,  as  well  as  $670,789,517 
of  Federal  revenues  now  collected  by  consumption  taxes 
through  the  customs  and  internal  revenue  systems. 

As  we  have  seen,  the  pure  land  values  of  the  country 
are  at  least  $35,000,000,000.  They  undoubtedly  amount 
to  twice  that  sum.  But  even  if  we  assume  the  former 
figure,  the  annual  economic  rent,  measured  at  five  per 
cent,  amounts  to  $1,750,000,000.  It  is  probably  nearer 
$3,000,000,000.  As  we  have  seen,  the  total  revenues  to 
be  shifted  from  indirect  taxes  and  improvements  amount 
to  but  $1,189,963,028,  which,  assessed  against  the  rent,  or 
land  values,  would  still  leave  over  half  a  billion  dollars  in 
the  hands  of  the  land-owners. 

We  can  see  the  adequacy  of  the  land  values  tax  in  some 
great  city  where  the  land  is  valued  separately  from  the 
improvements,  and  is  valued  with  some  degree  of  accuracy 
as  it  is  in  New  York  and  Boston.  The  untaxed  land  values 
of  the  former  city  amount  to  nearly  $4,000,000,000. 
The  annual  rent  from  the  land  alone  equals  $200,000,000. 
All  of  the  needs  of  this  most  extravagant  city  could  be 
assessed  against  this  fund,  and  leave  untouched  for 
Federal,  State,  and  other  purposes  the  sum  of  $100,000,000 
a  year,^ 

1  The  total  revenues  of  New  York  amount  to  about  $170,000,000 
a  year.  The  city's  proportion  of  the  State  tax  amounts  to  about 
$25,000,000.  The  proportionate  part  of  the  Federal  revenues 
which  should  be  assigned  to  the  city  is  about  $30,000,000.  If  all 
these  revenues  were  collected  from  the  rent  of  the  land  of  the  me- 
tropolis, there  would  still  be  left  for  the  land-owners  something  like 
$30,000,000  a  year.  For  already  $60,000,000  is  being  taken  from 
the  land  each  year  under  existing  taxes  for  local  purposes. 


308  APPENDIX   11 

The  speculative  growth  in  land  values  is  enough  in 
itself  to  meet  the  needs  of  almost  any  growing  city.  Thus 
in  New  York  the  growth  in  the  value  of  the  land,  as  shown 
by  the  annual  reports  of  the  Commissioners  of  Taxes  and 
Assessments  for  the  years  1904  to  1908,  amounted  to 
$786,004,347.  This  is  equivalent  to  $196,501,086  a  year, 
or  $26,501,086  more  than  the  revenues  of  the  city.  The 
same  thing  is  true  of  Boston,  Philadelphia,  Washington, 
and  San  Francisco,  where  similar  studies  of  the  subject 
have  been  made. 

Mr.  C.  B.  Fillibrown,  of  Boston,  has  made  a  most 
careful  study  of  this  subject,  and  in  a  paper  read  before 
the  National  Tax  Association  in  Columbus,  Ohio,  in 
1907,   said: 

"The  following  Boston  estimate  indicates  the  gigantic 
proportions  of  the  factor,  ground  rent,  and  its  sufficiency 
to  meet  all  reasonable  costs  of  government,  economically 
administered,  not  only  without  impoverishing  the  land- 
owner, but  without  subjecting  him  at  any  time  to  a  tax 
more  burdensome  or  more  continuous  than  that  borne  by 
every  man  that  has  lived  in  a  house  since  a  house  tax 
was  invented. 

The  gross  ground  rent  of  the  land  of  the  city  of  Boston 

is,  by  careful  estimate,  not  less  than $50,000,000 

Of  this  amount  there  is  already  taken  in  taxation  .     .       10,000,000 
Leaving  to  the  land-owners  of  to-day  a  net  grotmd 

rent  of $40,000,000 

"The  fact  that  this  sum  amounts  to  $68  per  capita, 
or  $340  per  family,  will  help  the  mind  to  grasp  its  magni- 
tude as  a  factor  in  the  distribution  of  wealth. 

State  and  local  taxation  upon  improvements,  build- 
ings, personal  property,  and  polls  amount  to  some- 
thing over  another $10,000,000 

If  this  additional  amount  were  taken  from  rent,  there 
would  still  remain  to  the  land-owners  a  balance  of  .     $30,000,000 
— $51  per  capita,  or  $255  per  family." 


THE  LAND  VALUES  TAX  309 

How  readily  all  of  the  revenues  of  the  nation  could 
be  met  from  rent  in  its  various  forms  is  seen  from  the 
policy  pursued  by  the  government  in  its  treatment  of  the 
lands  of  the  Lidian  tribes  in  Oklahoma,  referred  to  else- 
where. Minnesota  has  demonstrated  the  same  thing  in  a 
small  way.  That  State  was  fortunate  enough  to  retain 
some  of  its  school  lands.  LTpon  them  iron  ore  was  dis- 
covered. There  were  but  fifteen  iron  ore  deposits  in  all, 
but  through  the  imposition  of  a  royalty  of  twenty-five 
cents  a  ton  on  the  ore  mined,  the  State  has  come  into  pos- 
session of  a  fund  of  over  $16,000,000.  Had  the  Federal 
Government  pursued  this  policy  from  the  beginning,  as  it 
is  now  proposed  by  the  President  in  his  recent  message 
on  conservation  to  Congress,  all  of  the  revenues  of  the 
Federal  Government  could  have  been  met  by  a  royalty 
charge  of  one-quarter  of  the  value  of  the  mineral  output 
of  the  country,  which,  according  to  the  Geological  Survey, 
was  worth  the  sum  of  $2,069,289,196  in  1907.  Five  hun- 
dred millions  of  dollars  could  have  been  realized  from 
this  source  had  the  nation  reserved  but  25  per  cent,  of  the 
value  of  its  mineral  products  alone. 

In  foreign  countries  the  increase  in  land  values  and  the 
possibilities  of  their  taxation  for  public  purposes  are  being 
urged.  In  an  article  entitled  "  Wohnungsnot,"  in  Con- 
rad's Jahrbiicher  for  1902,  it  is  asserted  that  the  land 
underlying  the  city  of  Berlin  increased  in  value  in  twenty 
years,  from  1870  to  1890,  by  the  sum  of  $875,000,000,  or 
at  the  rate  of  $43,750,000  a  year.  Mr.  Camille  Huysmans, 
in  a  publication  entitled  La  Plus-Value  Immobiliere  dans 
les  Communes  Beiges  (Brussels),  has  gathered  together 
evidences  of  the  increase  in  urban-land  values  in  the 
countries  of  Europe.  He  shows  that  in  Germany,  Eng- 
land, France,  Belgium,  and  elsewhere  the  increase  is  only 


310  APPENDIX  II 

less  significant  than  in  the  United  States.  And  in  Ger- 
many, this  unearned  increment  is  already  being  taxed  by 
most  of  the  larger  cities,  while  in  Great  Britain,  Belgium, 
and  Switzerland  measures  are  being  pressed  for  the  same 
purpose. 


INDEX 


Agricultural   land,    Increase   in 

value  of,  p.  131 
Anthracite   coal,   Monopoly  of, 

p.  153 
Aster  estate,  p.  124 


B 


Banking  methods.  Change  in 
character  of,  p.  59;  monopoly 
of  credits,  p.  62 

Belgium,  Land  system  and  ten- 
ancy in,  p.  91 

Bituminous  coal,  Monopoly  in, 
p.  50 

Black  Plague,  p.  9;  Effect  of  on 
society,  p.  279 


City,  Cost  of  land  monopoly  in, 
p.  168 

Civil  War,  Influence  of  public 
lands  on,  p.  20;  ascendancy 
of  privileged  classes  during, 
p.  207 

Civilization  and  decay,  p.  239 

Class  legislation,  p.  104;  class 
rule,  p.  107 

Coal,  Monopoly  in,  pp.  46,  153  ; 
land  values  in,  p.  132;  mo- 
nopoly charges  for,  p.  167 

Common  ownership  of  land,  p.  96 

Community  land,  Village  owner- 
ship of,  p.  98 

Consolidation  of  wealth  in 
America,  p.  57 


Copper,  Value  of  deposits  of, 
p.  53;  land  values  in,  p. 
132 

Cost  of  living.  Increase  in,  p.  174 

Costs  of  tenancy,  p.  83 


D 


Dangers  of  railway  monopoly, 
p.  143 

Decay,  Civilization  and,  p.  239 

Demand  and  supply,  Law  of, 
p.  117 

Democracy,  Economic  founda- 
tions of,  p.  18;  influence  of 
West  on,  p.  21;  effect  of  eco- 
nomic opportunity  on,  p.  25; 
due  to  communal  land  tenure 
in  early  times,  p.  97;  era  of, 
p.  206;  meaning  of,  p.  294; 
of  to-morrow,  p.  294 

Distribution  of  wealth,  p.  185 


E 


Economic  influence  of  land,  p.  12 

Economic  interpretation  of  poli- 
tics. Preface;  p.  203 

England  (See  Great  Britain); 
feudalism  in,  p.  8 

Extravagance  in  government, 
due  to  tariff,  p.  221 


Famine,  Cause  of,  p.  Ill 
Federal    Constitution,     Venera- 
tion for,  p.  108 


311 


312 


INDEX 


Feudalism,    in    England,    p.    8; 

source  of,  p.  95;    completion 

of,  p.  99;   essence  of,  p.  106 

Feudal    tenure.     Distinguishing 

feature  of,  p.  101 ;  destruction 

of,  p.  102 

Finance,  New  methods  in,  p.  58 

Franchise     corporations.     Land 

values  in,  pp.  133,  154 
Fraudson  the  public  domain, p.  39 
Freedom,  traceable   to   systems 
of  land  tenure,  p.  25;    indus- 
trial, p.  298.     (See  Liberty.) 


G 


Government,  commercialized  by 
the  Civil  War,  p.  211 

Great  Britain,  Feudalism  in,  p. 
8;  village  community  in,  p. 
98;  land  monopoly  in,  p.  164; 
cause  and  extent  of  poverty 
in,  p.  165;  effect  of  land  mo- 
nopoly in,  p.  192;  free  trade  in, 
p.  300 

Ground  rent,  a  feudal  survival, 
p.  148.     (See  Rent  and  Land.) 

H 

High  finance,  p.  58 
Holland,    Effects  of   system  of 
land  tenure,  p.  92 


Indian  tribes.  Leasing  of  lands  of 

by  government,  p.  31 
Indirect  taxation,  Origin  of,  p. 

204;    some  of  the  costs  of,  p. 

218;   war  due  to,  p.  222 
Industrial  consolidation,  p.  64. 

(See  Monopoly.) 
Industrial  freedom,  p.  298;  effect 

of,  p.  301 
Ireland,    Effect    of    competitive 

tenancy     in,     p.     88;      John 

Stuart  Mill  on,  p.  120 


Iron  ore.  Monopoly  of,  p.  51; 
holdings  of  United  States 
Steel  Corporation,  p.  52 

Insurance  companies,  p.  60 


Labor  problems.  Inadequacy  of 
explanation  of,  p.  173 

Land,  Effect  of  system  of  tenure 
in  ancient  Rome,  p.  5;  mo- 
nopoly in  England,  p.  10; 
economic  influences  of,  p.  12; 
cause  of  American  Revolu- 
tion, p.  19;  influence  of  public 
lands  in  America,  p.  20; 
wages,  effect  of  free  land  on, 
p.  23;  extent  of^^public  lands 
in  America,  p.  28;  poHcy  of 
government  in  relation  to,  p. 
31;  land  grants,  p.  32;  value 
and  extent  of,  p.  35;  land 
monopoly,  extent  of,  p.  43; 
monopoly  of,  p.  75;  private 
property  in,  p.  100;  values  of, 
p.  116;  in  New  York  City,  p. 
124;  elsewhere,  p.  129;  in  the 
United  States,  p  135;  railway 
problem  a  land  problem,  p. 
138;  policy  in  distribution  of 
public  lands,  p.  177;  cause  of 
land  values,  p.  187;  socializa- 
tion of  land  values,  how  ac- 
complished, p.  259.  (See  Land 
Values,  Monopoly,  Single 
Tax.) 

Land  grants  to  railways,  p.  32; 
corruption  connected  with,  p. 
35 

Landlordism,  Origin  of,  p.  102 

Laveleye,  on  tenancy  in  Bel- 
gium, p.  91 

Law,  Effect  of  on  society,  Pref- 
ace; p.  203 

Liberty,  Meaning  of  industrial, 
pp.  256,  295,  301 

Loria,  Achille,  on  class  ascend- 
ancy in  politics,  Preface;  p.  3; 


INDEX 


313 


on   wage   conditions   in   new 
countries,  p.  178 

M 

Migrations  of  people,  p.  4 

Mill,  John  Stuart,  pp.  88,  120 

Mineral  production  in  United 
States,  p.  154 

Mineral  resources.  Disposal  of, 
p.  45;  value  and  annual  prod- 
uct of,  p.  54;  extent  of  con- 
trol of  by  monopoly,  pp.  55, 
166 

Money  monopoly,  p.  59 

Monopoly,  see  Land;  extent  of 
land  monopoly,  p.  45;  pe- 
troleum, p.  47;  other  minerals, 
pp.  46  to  53;  money  monopoly, 
p.  59;  Wall  Street  and  mo- 
nopoly, p.  60;  cause  of,  p.  68; 
railways,  p.  143.  (See  Land 
and  Railways.) 

Morals,  Economic  foundations 
of,  p.  243;  made  by  the  as- 
cendant economic  class,  p.  244 


N 


Natural  gas,  p.  49 

Negro  slavery,  p.  109 

New  York  City,  Land  values  in, 
p.  126;  means  for  the  social- 
ization of,  p.  260;  burden  of 
rent  in,  p.  151 


O 


Oklahoma,    Value  of  lands   in, 

p.  130 
Overproduction  impossible,     p. 

119 

P 

Pacific  railways.  Land  grants  to, 
p.  33;  corruption  and  frauds 
connected  with,  p.  35 

Petroleum,  Monopoly  in,  p.  47 


Politics,  Merger  of  with  privilege, 
p.  213;  class  control  of  in  all 
countries.  Preface;  in  America 
p.  215;  some  of  the  costs  of, 
p.  229 

Population,  Effect  of  on  land 
values,  p.  114;  density  of,  p. 
160 

Poverty,  Cause  of,  p.  119;  in 
Ireland,  p.  120;  causes  usually 
assigned,  p.  157;  an  over- 
looked cause  of,  p.  229;  costs 
of,  p.  238 

Private  property  in  land,  p.  100 

Privilege,  Motive  of,  p.  231;  cost 
of,  p.  235;  control  of  press  by, 
p.  250 

Production,  Mineral,  in  America, 
p.  154 

Prosperity,  progress  of  produc- 
tion, p.  118;  in  new  countries 
due  to  land,  p.  195 

Protective  tariff.  Origin  of,  p. 
204;  a  war  product,  p.  207; 
some  of  the  costs  of,  p.  218; 
effect  of  abolition  of,  p.  287 

Public  lands,  see  Land;  influence 
on  in  America,  p.  20;  extent 
of,  p.  28;  relation  of  govern- 
ment to,  p.  31 

Public  Lands  Commission,  Re- 
port of,  p.  86 

Public  domain.  Extravagance  io 
its  disposition,  p.  177 


R 


Railways,  see  Monopoly  and 
Land;  land  grants  to,  p.  32; 
corruption  connected  with,  p, 
35;  consolidation  of,  p.  55; 
increase  in  rates  on,  p.  56; 
values  of,  133;  railway  prob- 
lem, a  land  problem,  p.  138; 
monopoly  of,  p.  143;  relation 
of  Pacific  railways  with  Con- 
gress, p.  210;  connection  with 
politics  and  increase  in  capital- 


314 


INDEX 


ization  and  earnings,  p.  225; 
extent  of  tax  evasions,  p.  227; 
necessity  of  public  ownership 
of,  p.  289 

Rent,  see  Land  and  Single  Tax; 
origin  of  competitive,  p.  102; 
increase  of,  p.  119;  a  feudal 
survival,  p.  148;  a  burden  on 
labor,  p.  150;  not  limited  to 
land  alone,  p.  152;  total  in 
United  States,  p.  15G;  opin- 
ions of  economists  on,  p.  189; 
taxation  of,  p.  258;  effect  of 
taxation  on,  p.  271;  amount 
of  in  America,  p.  307;  in  the 
larger  cities,  p.  308 

Resources  of  America,  p.  29; 
disposal  of,  p.  45 

Revenues  of  Federal  Govern- 
ment, p.  217 

Revolution,  American,  causes  of, 
p.  19 

Roman  law,  basis  of  land  tenure, 
p.  94;  source  of  feudal  system, 
p.  95 

Rome,  see  Land  Monopoly;  evo- 
lution of,  p.  4;  land  monopoly 
in,  p.  6;  Roman  law,  basis  of 
land  monopoly,  p.  94 


Standard  Oil  Company,  Extent 

of  holdings  of,  p.  48 
Supply  and  demand,  Law  of,  p. 

143 


Tariff,  Evolution  of,  p.  204;  a 
war  product,  p.  207;  some  of 
the  costs  of,  p.  218;  wars  due 
to,  p.  222 

Tax  evasions,  p.  227 

Taxation.  (Sec  Indirect  Taxa- 
tion and  Tariff.) 

Tenancy,  Extent  of  in  United 
States,  p.  71  et  seq.;  effect  of, 
p.  76  et  seq.;  in  Ireland,  p.  88; 
in  Belgium,  p.  91;  origin  of, 
p.  102  et  seq. 

Tenement  conditions  in  New 
York,  p.  150 


U 


Unearned  increment,  p.  122 
United  States  Steel  Corporation, 

p.  52;   value  of  land  holdings, 

p.  153 


S 


Scotland,  Land  monopoly  in,  p. 

164 
Serfdom,  Evolution  of,  p.  94 
Servitude,  Explanation  of,  p.  121 
Settlement  of  America,  p.  12 
Single  tax.  Meaning  of,  p.  257 
et  seq.;  justice  of,  p.  264;   as 
a  social  philosophy,  p.  264;  ef- 
fect on  distribution  of  wealth, 
p.  276;  on  industry  and  wages, 
p.  277;  on  wages,  p.  281;  suf- 
ficiency of  in  United  States, 
p.  306;  movement  for  in  other 
countries,  p.  309 
Speculation,  Effect  of  land  values 
ta.x  on,  p.  267 


Values,     Land,     p.     116.     (See 

Land.) 
Veneration  for  old  ideas,  p.  107 
Village  community,  p.  98 

W 

Wages,  Effect  of  free  land  on,  p. 
23,  movement  of  in  United 
States,  p.  174;  what  deter- 
mines, p.  181;  effect  of  mo- 
nopoly on,  p.  181;  strikes  and 
labor  wars,  p.  182;  iron  law 
of,  p.  199;  average  of  in 
United  States,  p.  235;  effect 
of  single  tax  on,  p.  277;  Black 
Plague  and,  p.  279 


INDEX 


315 


Wall  Street,  Extent  of  control 

of,  pp.  55,  60;  identified  with 

politics,  p.  209 
Wallace,  Alfred  Russel,  on  land 

monopoly    in     Scotland,     p. 

164 


War,  traceable  to  indirect  taxa- 
tion, p.  222 

Wealth,  Consolidation  of,  p.  57; 
distribution  of,  p.  185;  produc- 
tion of  in  America,  pp.  185,233 

West,  Enclosure  of,  p.  16 


BOOKS  BY  FREDERIC  C.  HOWE 

The  British  City 

The   Beginnings  of  Democracy 

12mo.    $1.50  net 


CONTENTS 

Introductory. 

Glasgow— A   City   of    Things 

The  Beginnings  of  Democracy. 

and  Conscience. 

The  Town  Council. 

London:  A  Municipal  Democ- 

The Citizen  and  the  City. 
The  Ideal-s  of  the  British  City. 

racy. 

The  American  and  the  British 

The  Growth    and    Extent    of 

City;  A  Comparison. 

Municipal  Trading- 

The  Dead  Hand  of  the  Land. 

The  Cities  and  the  Tramways. 

The  British  Parliament— The 

The  Ga-s  Supply. 

Sanctuary  of  Privilege. 

The  Electncity  Supply. 

The  Upper  and   Nether  Mill- 

The Greatest  Gain  of  .Ml. 

stones  of  Privilege. 

The  Municipality  and  Labour. 

The  Next  Step  of  Industrial 

Parliament  and  the  Cities:  The 

Democracy. 

Tyranny  of  a  Class. 

The  City  of  To-morrow. 

Index. 

"The  author  views  the  hi.story  of  municipal 
government  in  England,  de.scribes  its  structure  and 
form.  .  .  .  His  position  is  unquestionably  sound,  and 
he  reflects  the  spirit  of  the  age  and  the  dominant 
tendencies  and  ideas.  He  has  written  a  vital  and 
significant  book." — Chicago  Post. 

"A  valuable  contribution  to  a  branch  of  political 
science  of  the  foremost  present  importance." 

— Philadelphia  Press. 

"There  are  few  persons  interested  in  municipal 
questions  who  will  not  find  it  of  value." 

—The  Nation. 


BOOKS  BY  FREDERIC  C.  HOWE 

PUBLISHED  BY 

CHARLES    SCRIBNER'S    SONS 

The  City 

The     Hope     of     Democracy 

12mo.    $1.50  net. 


CONTENTS. 

Introductory 

The  City  Republic. 

The  New  Civilization. 

The  City  Charter. 

Tiie  Profit  Account. 

The  Cost  of  the  Slum. 

The  Loss  Account. 

The  City's  Homes. 

The  American  City  at  Work. 

The  City's  Wreckage. 

The  Source  of  Corruption. 

The  Wards  of  the  City. 

The  Boss,  the  Party,  and  the 

The  City  Beautiful. 

System. 

The  City's  Trea-sure. 

The     Way     Out  —  Municipal 
Ownership. 

The  Revenues  of  the  City. 

The  City  for  the  People. 

Does     Municipal     Ownership 
Pay? 

The  Hope  of  Democracy. 

Index. 

"  In  bis  analysis  of  the  present  political  and  municipal 
systems,  the  author  shows  not  only  a  profound  knowledge  of 
his  theme,  but  an  enlightened  and  constructive  conception  of 
the  remedies  which  will  require  to  be  employed  in  the  recti- 
fication of  existing  abuses." 

— John  lire  Primrose,  Lord  Provost  of  Glasgow. 

"Every  chapter  is  interesting.  'The  City '  merits  a  wide 
reading  and  is  calculated  to  do  a  most  useful  service." 

— Hon.  Lucius  F.  C.  Garvin. 

"  A  frank  discussion  of  municipal  problems  as  they  are 
actually  encountered  in  the  more  typical  of  our  American 
cities.     The  prevailing  note  is  one  of  optimism." 

— Review  of  Reviews. 


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